rooftop solar PV
Makro rooftop solar PV system. Source: Nesa Investment Holdings

In South Africa, a local renewable energy fund that invests in commercial and industrial-scale renewable energy systems, Nesa Investment Holdings, recently acquired the portfolio of Makro’s carport solar photovoltaic (PV) systems, located at various Makro stores countrywide.

The solar PV systems generate clean, affordable electricity fed directly into Makro stores allowing them to immediately reduce their total monthly electricity bills. Solar PV also assists in relieving pressure on the national grid.

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The Makro sites include Woodmead, Riversands, Carnival, Strubens Valley and Springfield, with Silverlakes expected to begin construction in the coming weeks.

The acquired portfolio has the capacity to generate approximately 4.4 million kWh and offset 4,700 tonnes of CO2 emissions per annum. 

The Strubens Valley store alone has a 480kW peak plant output that is estimated to produce one-quarter of the store’s annual energy needs. The system consists of 147 car park-mounted polycrystalline PV panels.

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The plant provides nearly half of the store’s daily energy requirements and is estimated to provide 24% of the store’s total annual energy consumption.

Operating model places Nesa Investment at the forefront

An additional two rooftop solar PV sites were acquired in this transaction, bringing Nesa Investment Holdings’ assets under management to R158 million across 40 sites in South Africa.

“Through a 20-year management agreement, we commit to covering the full installation cost of the solar PV systems and maintenance to ensure optimal performance. Our clients benefit from immediate savings in energy costs with zero capital expenditure,” explains Peter Frolich, director at Nesa Investment Holdings.

The electricity generated by the systems is sold to Nesa’s clients at a discount to their current municipal tariffs and escalate annually at fixed rates. This model protects the clients against abnormal tariff hikes in the future.

“More and more corporates are seeking alternative energy sources, but developing, finding or managing alternative energy does not form part of their core business,” says Frolich. “Our organisation is able to supply and operate the most appropriate solutions for each site and we simply guarantee a minimum quantity of energy, leaving our clients to focus on their business, while adding to their bottom line.”

What the Makro acquisition means to the market

This latest acquisition positions the fund as a leading independent investor and operator of commercial and industrial-scale renewable energy generation facilities. The fund’s current installed generation capacity is 6.6MWp and is expected to grow to over 11MWp by the end of 2019 with over 20 additional solar PV sites at various stages of completion across South Africa.

The acquisition was funded from capital raised from Nesa Investment Holdings’ shareholders, as well as a debt facility provided by Absa’s Retail and Business Bank (RBB SA).

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“With a significant reduction in the cost of solar module prices over the past decade as well as increases in the cost of electricity, solar PV has become a very cost-competitive solution,” says Justin Schmidt, Head of Renewable Energy RBB SA.

“We are committed to the renewable energy sector and funding of commercial and industrial solar PV installations. With the power challenges the economy faces, the renewable energy sector plays a vital role in providing additional energy security to the grid. We look forward to a successful relationship with Nesa Investment Holdings, which is creating immediate savings for their customers as well as an innovative platform to invest into solar assets.”