Two well-established South African renewables companies - African Clean Energy Developments and EIMS Africa - have officially combined to form a new large-scale independent power producer (IPP) known as Anthem.

The consolidation also coincides with the introduction of new shareholders into the entity, which has historical ties to the Old Mutual-linked African Infrastructure Investment Managers' (AIIM's) IDEAS Fund, which remains the majority shareholder in Anthem.

The entity's shareholding now also includes the black economic-empowered Mahlako Energy Fund, and Norfund, which together hold 15%, and with scope to increase that interest to 30%. Norfund, which is the Norwegian government's development investment fund, has confirmed a R1.5-billion equity investment into Anthem.

With 2.7 GW of wind, solar PV and hydro in production, under construction or near to financial close, the combined entity has between 12% and 15% of South Africa's current IPP market.

Its portfolio of 27 projects includes the 67 MW Umoya Wind Farm, reportedly the first utility scale wind project to reach financial close in 2012 under the South African government's renewables procurement programme.

It also includes projects developed on the back of private power purchase agreements, however, such as the 69 MW Msenge Emoyeni Wind Farm, a pioneering private offtaker facility supplying Sasol, as well as the Castle Wind Farm, which is described is the largest private-offtake wind farm, with 89 MW contracted to supply Sibanye-Stillwater.

Anthem currently generates over 2 400 GWh yearly, with an additional 1 350 GWh to come online in 2026.

11 GW PIPELINE

CEO James Cumming reported at Anthem's launch that the entity had an immediate goal of growing its capacity to 6 GW by 2030 off the back of an 11 GW project pipeline.

He also indicated that it would pursue hybrid battery energy storage systems (BESS) at some of its power stations and would assess standalone BESS investments, particularly ones that could assist it in being a balance responsible party as envisaged for participation in the upcoming South African Wholesale Electricity Market, or SAWEM.

Anthem had no intention of becoming an aggregator or a trader, with Cumming indicating that it would remain a pure-play IPP focused on project development, construction and operation. But it might consider seeking a trading licence should that emerge as a requirement for full participation in SAWEM.

It will, thus, also not participate in the upcoming procurement of independent transmission projects and will develop grid infrastructure only to connect its own projects.

As an IPP it will pursue growth within the Southern African Development Community (SADC) region, over and above the hydro and solar PV projects it has already developed in Eswatini.

Cumming said that its growth ambitions would require the raising of additional capital and, thus, he did not discount the prospect of a future listing of Anthem, or a further broadening of its shareholder base.

Chairperson Sean Friend, who was also AIIM's chief investment officer for SADC, forecast that Anthem would have a material impact on the region's energy landscape, owing to its significant large-scale projects already under way, and its strong growth pipeline.

Anthem currently employs 80 people and aims to expand its employee base incrementally as it adds additional capacity and takes over more of the operations and maintenance functions at its facilities.

COO Ryan Hammond highlighted the growth in the scale of the projects being pursued by the company, arguing that while 140 MW wind farms were once viewed as large-scale, Anthem was currently developing and building projects that would be larger by a factor of five.

"As a long-term owner and operator with deep local expertise, we are committed to building a sustainable energy future - delivering progress and prosperity for people across South Africa and the region in years to come," Hammond said, highlighting the emplo...