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Greenline Africa has signed a framework agreement with Absolicon (Sweden) for the acquisition of a production line for the solar collector T160 in South Africa.

The total sales value covered by the agreement is estimated at approximately €4 million plus a monthly license fee of 4% and the sale of components.

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The production line will initially assemble and later manufacture Absolicon's concentrating solar collectors. The South African production line will be of the same model as already introduced by Absolicon to the Sichuan province with the capacity to manufacture 100,000 m2 solar collectors per year.

"With this investment, GreenLine Africa looks forward to making a direct, meaningful contribution to local manufacturing sector growth and energy transition-related job creation," says Brenda Martin, investment director at Greenline Africa.

The agreement extends to include training and skills development where local employees receive training in operating the production line while local sales personnel and technicians receive training in projecting solar collector installations.

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The partnership will thus result in local manufacturing investment as well as job creation. The solar collector T160 is designed to produce heat and steam for industries and for district heating networks.

Through the agreement, Absolicon ensures GreenLine Africa access to patented components and high-quality inputs that will initially be partly manufactured in South Africa. At full production, it is envisaged that 70% of the required components will be sourced from GreenLine Africa's own local subcontractors.

Sales of process equipment from Solar++ in addition to sales from Absolicon, it is also likely that Saravanos Solar++ AB, which is 50% owned by Absolicon, will supply process equipment to the solar heating installations. Solar++ first product is a solar powered evaporator, an example of process equipment that is in demand by dairies and pharmaceutical companies.

Absolicon’s investment in the South African production line combined with the sale, and in order to support GreenLine Africa’s South African financing efforts, Absolicon has taken up the opportunity to enter as a minority shareholder with ownership in the production line and has signed a framework agreement with GreenLine Africa to the value of €1M.

Historical electricity prices

Given historically low electricity tariffs energy-intensive industries, mixed-use buildings, hospitality and leisure industries alike have relied on coal or gas supply for their heat and steam requirements.

Electricity prices have, however, risen sharply in recent years, often in combination with extended power outages. The need for secure, affordable supply in South Africa is growing. National and corporate policies associated with reducing carbon dioxide emissions add further imperative to the need to transition away from fossil-based power.

Finally, the direct economic potential associated with embedded, job-creating renewable power investment is self-evident. Payback periods are declining, more so when local assembly and manufacturing become possible.

Anticipated growth for the local production line The first sales of pilot installations of T160 in South Africa are expected during the second half of 2019.

Solar collectors for these initial installations will be supplied from Sweden. The local production line is expected to be operational in South Africa during the second half of 2020.