Renewable energy services provider, Starsight Energy, and South African-based solar firm, SolarAfrica Energy are planning to merge. This merger, subject to regulatory approvals, would combine the strengths of the two companies to become a dominant solar player on the African continent, with a genuine pan-African footprint, providing competitive full-service renewable energy and energy efficiency solutions to the commercial and industrial sector.
The merger, which is subject to standard regulatory approvals including anti-trust approvals, comes at an opportune time following favourable changes in South African renewable energy regulations. The merger would create the first truly Pan-African renewable energy services provider, amidst a global drive towards greener and cleaner energy sources, which is well positioned to serve an even wider range of clients with a comprehensive mix of renewable energy solutions that provides power security, cost savings and carbon reduction.
The merged entity would comprise a portfolio of over 220 MW of operated and signed generation capacity, and 40 MWh of battery storage, with an additional pipeline exceeding 1 GW.
Key highlights
• The merged group, subject to regulatory approvals, would be a commercial and industrial (C&I) service provider, covering the full scope of C&I projects, from rooftop projects to large-scale corporate power purchase agreements (PPA) backed projects.
• It would provide carbon reduction, power security and cost savings to blue-chip clients in a number of key economic sectors including banking, healthcare, education, manufacturing and data storage.
• It would span three key geographical hubs (Eastern, Southern and Western Africa) with further pan-African diversification being considered.
• Solutions are technology-enabled via proprietary, inhouse developed software which covers development, construction and asset management.
• The merged group, backed by Helios Investment Partners and African Infrastructure Investment Managers (AIIM), would comprise a portfolio of over 220 MW of operated and contracted generation capacity, with 40 MWh of battery storage, and an additional pipeline exceeding 1 GW.
• Key credentials include Starsight being the first renewable energy company in Nigeria to secure carbon credit accreditation, whilst SolarAfrica was named African Solar Company of the Year during 2021.
• The transaction represents a vote of confidence in the pan-African renewables sector, with Helios and AIIM increasing their investment footprint in multiple markets across the continent.
Alongside the merger, funds managed by AIIM have committed substantial further funding to the South African subsidiary of the merged entity, to progress the build-out of the contracted pipeline in the C&I wheeling market in South Africa, providing energy security and certainty of pricing to large C&I customers.
Over and above the global shift towards the reduction of greenhouse gas emissions through decarbonisation, the demand for cost-effective and reliable power by commercial and industrial users will continue to grow and open further opportunities in the renewable energy sector particularly in South Africa, where power supply is expected to remain constrained with a substantial deficit of generation capacity.
Tony Carr, Starsight Energy’s Group Chief Executive Officer, explains: “This merger demonstrates our joint commitment to expand our footprint across Africa. With SolarAfrica, the new combined group becomes one of the largest commercial providers of reliable and clean energy solutions to the commercial and industrial sector across the continent.”
“The merger will enable efficiencies across the group, ranging from procurement to funding, and further allow for the rollout of our proprietary technology platform across the continent. These efficiencies will assist the group in providing a unique and valuable offering, that takes customers on a green energy journey to solve their power struggles and enables a sustainable future for their businesses,” says David McDonald, SolarAfrica Energy cofounder and Chief Executive Officer.
Olusola Lawson, Managing Director and co-Head at AIIM, comments: “The transformational Starsight/SolarAfrica merger is a strong illustration of value creation in the nascent African commercial and industrial renewable energy space. As one of Africa’s largest renewable energy equity investors, and with a renewable energy portfolio of about 2 GW, AIIM has been privileged to play a key role in the growth and expansion of the Starsight platform over the last five years. We are delighted to continue to support the business with additional funding to expedite the realisation of its substantial pipeline, and we look forward to the continued success of the combined platform.”
Ogbemi Ofuya, Partner at Helios Investment Partners notes: "This transaction combines the complementary capabilities and geographical reach of two leading players in distributed energy solutions for businesses and industries across Africa. Helios has been a part of Starsight’s journey from its inception and has supported the growth of the business leveraging on our experience in building and scaling market leading infrastructure businesses on the continent. This transaction creates a market leader across sub-Saharan Africa’s largest economies, with a long track-record of providing, cleaner and more reliable energy solutions for its customers delivered at competitive price levels. We remain excited about the significant growth prospects of the enlarged Starsight platform.”
The newly formed entity would comprise of 340 staff across multiple jurisdictions and create a combined shareholder group providing financial capacity to deliver renewable energy services across Africa.
Looking ahead, the two parties believe that their combined expertise, along with SolarAfrica’s energy solutions software platform, which enables its sales teams to customise energy proposals and produce accurate savings projections, will not only position the group as Africa’s leading provider of green energy solutions to commercial and industrial power users, but will also accelerate Africa’s transition towards a greater renewable energy mix.
About Starsight Energy
Starsight Energy was founded in 2015 and is backed by Helios and AIIM, a member of Old Mutual Alternative Investments. It offers reliable and sustainable energy and cooling solutions – on- and off-grid – to the C&I sectors, with market leading operations in East and West Africa with over 656 sites in Nigeria, Kenya and Ghana. The company was named one of Africa’s fastest growing companies in 2022 by the UK’s Financial Times and is also the first renewable energy company in Nigeria to secure carbon credit accreditation, certified by the Verra Verified Carbon Standard (VCS) programme, the world’s most widely used voluntary greenhouse gas (GHG) certification programme.
About SolarAfrica
Founded in 2011, SolarAfrica has built up extensive experience in delivering state-of-the-art energy solutions through power purchase agreements (PPAs) to businesses across Southern Africa. It has evolved from a specialist provider of rooftop solar photovoltaic systems to a full-service provider of capex-free, green energy solutions ranging from solar and battery storage options through to wheeling and electricity trading to the C&I market.
SolarAfrica has already positioned itself as a competitive player in the newly enabled power wheeling space, having recently signed up large blue-chip customers. The group is now well positioned to service large power users with a lower cost electricity alternative from a recently developed centralised solar generation site, taking advantage of South Africa’s newly revised regulations permitting wheeling and self-generation of up to 100 MW by private generators. In 2021, SolarAfrica was named the continent’s leading solar energy firm, scooping the Africa Solar Industry Association’s African Solar Company of the Year award.
Contact Charl Alheit, SolarAfrica, Phone 012 881-4800, info@solarafrica.com, https://solarafrica.com
