Page 12 - AfrElec Week 09 2021

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Egypt’s El Sewedy Electric

positive on growth

EGYPT EL Sewedy Electric’s FY2020 conference call distribution, engineering and substations pro-
with analysts showcased the growing backlog of jects are to be added in 2021, as well as genera-
works, pointed to large M&A appetite with two tion projects in Africa.
acquisitions in the pipeline and indicated that Moreover, the focus on both organic and
EPC margins would moderate in the future, VTB inorganic growth continues to increase the
Capital (VTBC), an investment bank in Russia, customer base, open new markets, improve the
reported in a client note. product mix and focus on digitalisation. The
Management is positive on the turnkey busi- company has made great progress in foreign
ness reaching 49% of total revenues in 2020. acquisitions and is at the final stage of acquiring
The backlog as of the end of fourth quarter 2020 two businesses, one in Pakistan and the other in
stood at EGP49bn ($3.12bn). El Sewedy expects Indonesia.
to maintain this pace and aims to have EGP23bn The company expects its gross profit margin
of turnkey business revenues annually, with the to be 13-14%, with stable or slightly higher mar-
ability to add the required volume of projects to gins across the divisions. Management is bullish
the backlog. on 2021, expecting double-digit growth in the
In terms of margins, most of the 2020 addi- top line and net income. VTBC sees El Sewedy
tions were from transmission and distribution Electric’s 50% dividend cut as unfavourable for
projects in Egypt, so the margin is lower than the short-term share price performance, though
generation projects, but the large hydro dam the possibility of additional dividends is sup-
project and two projects in Dubai are high-mar- portive, putting a buy recommendation on the
gin, VTB Capital noted. More transmission and stock.™

NEWS IN BRIEF

OFF- GRID capacity to 17,300 MW by 2025, with of sunshine and adequate solar resources.
power generation projects in hydro, wind, KTDA will through its subsidiary KTDA
Ethiopia seals off-grid deal geothermal, solar and biomass sectors. Power Company (KTPC) invited Independent
Power Producers (IPPs) to build solar power
The government has also embarked on
with Chinese, South Korean massive energy projects across the country plants in its twenty-nine factories.
The IPPs will then design, procure,
with a view to succeeding in its plans to make
firms the East African country a light industry hub construct, finance and operate the solar
projects. They will also enter into Power
in Africa by 2025.
The Ethiopian government has signed a Purchase Agreements with different factories
$24mn off-grid electrification project contract which will purchase the generated energy.
with three Chinese firms and one South KTPC was established in January 2020 as a
Korean firm, an Ethiopian official said on SOL AR wholly-owned subsidiary of KTDA holdings
Tuesday. limited.
Speaking to Xinhua, Melaku Taye, Blow to Kenya Power as Kenya Breweries and East Africa Maltings
Communications Director at Ethiopian in January 2021 also announced that they
Electric Utility (EEU), said the project aims More Firms Move to Solar were seeking regulatory approvals to enable
to electrify 25 rural towns across the country, them set up three power plants.
which is expected to benefit about 145,000 The Kenya Power Company is expected to The three include two solar power plants
people living in this area. lose its largely monopolistic market power and one thermal generator. The two solar
The Africa Development Bank and the with more firms moving to solar energy in a power plants include a 9.3 Megawatts(MW)
Ethiopian government are expected to jointly bid to cut electricity expenses. plants at KBL Ruaraka and another 2.4 MW
cover the total cost of the project. Kenya Tea Development Agency (KTDA) solar plant in Kisumu. The 2.2 MW thermal
Ethiopia expects the off-grid electrification is the latest firm that has applied for a licence generator will be set up the East Africa
project to be completed in six months. to generate its power using solar. Maltings factory in Industrial Area, Nairobi.
The government is working to increase KTDA is seeking to install solar power In 2020, Total Kenya confirmed that they
electrification coverage across the country generators in its twenty-nine factories, a move had solarized a hundred petrol stations and
from around 60 percent currently to 100 that will help the company cut almost fifty that they will be solarizing all their station in
percent by 2025. percent of its power bills. the future.
Ethiopia further plans to increase its An assessment done on the twenty-nine Kenyan entities that use solar power plants
current 4,280 MW electricity generation factories showed that they had enough hours include Kenya Ports Authority, Kapa oil,

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