RMB facilitates the merger of four black-owned engineering businesses that resulted in iThokazi

Tebogo Mohwaduba
Tebogo Mohwaduba

RMB recently introduced four of its existing BEE clients in the renewable energy sector. This introduction led to the creation of iThokazi - Nguni for female calf - a symbol of growth and prosperity, but also an acknowledgement of the hard work that lies ahead.

iThokazi is set to become one of the country’s largest 100% black-owned renewable energy holding companies. In addition to holding shares in a total of eight projects, six solar PV and two wind projects, iThokazi now has the ability, as well as the critical mass, to actively participate across the renewable energy value chain by offering construction, ongoing operational and maintenance services.  

Applying a solutions-driven approach, RMB spotted several synergies between the companies who are already operating within the renewable energy sector. To highlight a few: a desire to grow, need for a capital injection into their businesses, critical mass to enable ongoing active participation in their projects, ability to participate in future rounds of the Renewable Energy Independent Power Producer Procurement (REIPPP) programme, and the ability to partner with companies that provide complementary engineering services.

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).

To facilitate the merger, RMB provided a facility of R310 million. A large portion of this was used to settle all existing liabilities across each of the four entities, with the balance reinvested.

Of the eight operational assets, generating 300 megawatts (MW) of clean energy, six are solar PV (50 MW De Aar project outside De Aar; 50 MW Droogfontein project outside Kimberley; 10 MW Ariesfontein, southwest of Kenhardt; 11 MW Konkoonsies project northwest of Pofadder; in the Northern Cape; 10 MW Aurora-Rietvlei project near Aurora; and 11 MW Vredendal project in the town of Vredendal situated in the Western Cape). The remaining two projects are wind powered, and include the sizable 138 MW Jeffreys Bay between Jeffreys Bay and Humansdorp in the Eastern Cape and 27 MW Klipheuwel project west of Caledon in the Western Cape.

The company is currently working on acquiring a further two assets, increasing its megawatt capacity to over 500 MW across a total of ten assets. iThokazi is therefore well positioned, being a 100% black-owned owned business, to fulfill the Department of Energy’s requirement for active black participation and ownership in the renewable energy sector.

Tebogo Mohwaduba is an Infrastructure Finance Transactor at Rand Merchant Bank

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This post and content is written, provided and sponsored by Rand Merchant Bank. 

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