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Tata sells off African wind interests
SOUTH AFRICA
INDIA’S Tata Power has divested its 50% stake in its South African wind IPP Cennergi for $106mn as it sells off non-core assets in a bid to pay down debt.
Tata’s local subsidiary Khopoli Investments sold the shares to its partner, South African coal miner Exxaro Resources, which now owns 100% of Cennergi.
“The decision to monetise this South Afri- can asset is in alignment with our stated strat- egy to deleverage the balance sheet by divesting sub-optimal-sized international assets,” said Tata Power CEO Praveer Sinha.
“The proceeds from such sale would be re-in- vested in emerging areas where there is a huge growth opportunity. The company will focus on renewable power, power distribution and ser- vice-led businesses in India,” he added.
The ZAR1.55bn (106mn) deal is still subject to approval from the South African authorities.
Since 2012, Exxaro and Tata Power have developed two major wind projects with about 230 MW of capacity in South Africa through Cennergi.
Cennergi has a 95% stake in the 134.4-MW Amakhala Emoyeni wind farm and a 75% stake in the 95.3-MW Tsitsikamma Community Wind Farm.
Each project has a 20-year power purchase agreement (PPA) with the state power utility Eskom.
Cennergi will gain the rights to the two pro- jects in the Eastern Cape from the Department of Energy’s Renewable Energy Independent Power Producer’s Procurement Programme (REIPPPP).
“Exxaro is pleased with this opportunity to consolidate its interest in this renewable energy asset at a time in South Africa where we need energy security as we respond to increasing neg- ative sentiment towards coal-based electricity generation,” said Exxaro Resources CEO Mxol- isi Mgojo.
Exxaro is one of the country’s largest black- owned resource companies. As well as wind assets, it owns the Grootegeluk coal beneficia- tion complex and is one of the largest suppliers of coal to Eskom.™
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w w w . N E W S B A S E . c o m Week 37 18•September•2019