South Africa: RMB Creates iThokazi, a 100% Black Owned Renewable Energy IPP

  • RMB arranged and funded the consolidation of four renewable energy groups to create iThokazi, one of SA’s largest 100% black-owned renewable energy producers.
  • iThokazi is the Nguni word for female calf – a symbol of growth and prosperity, but also an acknowledgement of the hard work that lies ahead.
  • RMB Holdings Limited (RMB), previously known as Rand Merchant Bank Holdings, is a South African diversified financial services holding company.

South Africa has a marked need for more 100% black-owned independent power providers (IPPs) in the renewable energy sector, not only to grow transformation but to improve competition and development within the sector on a national level.

RMB brought together four existing BEE entities—Usizo, Enzani, Winners Circle and J&J—to pool their assets and capabilities to form a unique new entity in the renewable energy sector: iThokazi.

The merger of these black-owned engineering businesses was facilitated through RMB arranging and providing a ZAR310-million preferential share facility. In addition, the transaction allowed the BEE shareholders to upfront a portion of their future returns for reinvestment into their engineering and construction businesses.

As an IPP, iThokazi now owns shares in eight projects—two wind farms and six solar photovoltaic projects—capable of generating a combined 300 megawatts of renewable energy.

The four companies transferred their shares in existing round 1 and 2 REIPPP projects into iThokazi (and will in turn hold shares therein). With an operational track record spanning over 5 years, the projects in the portfolio were built on time and within budget. The anchor shareholders in each of the eight projects all have extensive global track records, which will prove beneficial to iThokazi and aid their ambition of being a leading 100% black-owned Independent Power Producer (IPP).

iThokazi is also a first-of-its-kind entity in that each of the companies merged all provide complementary engineering services to the renewables sector. This means that iThokazi delivers not only black ownership within the sector but also creates a BEE entity that is able to offer black-owned engineering services and advance further empowerment initiatives within the renewable energy sector.

Author: Bryan Groenendaal

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