Seriti Resources acquires majority interest in Windlab Africa’s 3.5 GW renewables assets

Significant step in the development of Seriti Green

A timely and strategic addition to Seriti’s valuable portfolio of coal assets

[Johannesburg, 15 August 2022] – Seriti Resources has entered into an agreement to acquire a majority stake in Windlab Africa’s wind and solar-powered assets through its subsidiary Seriti Green, as it seeks to lower its carbon footprint and ensure long-term sustainability as a diversified energy producer. This is a significant step in the development of Seriti Green, which was announced in November 2021. Windlab Africa consists of 100% of Windlab South Africa and 75% of Windlab East Africa.

Mike Teke, Seriti CEO said: “The acquisition is a timely and strategic addition to our existing and valuable portfolio of coal assets. Our commitment to the responsible and reliable production of coal for both domestic consumption and exports remains unwavering.” 

As a responsible coal producer, Seriti is conscious of the impact that fossil fuels have on the environment and is committed to playing an active role in helping manage the just transition to a low-carbon economy while balancing South Africa’s energy needs.

There is a growing need for stable power supply around the world, alongside a global shift to decarbonise and reduce reliance on fossil fuels. We are aware of the challenges currently facing Eskom, and as a result the country as a whole. The need for an energy supply that meets current and future needs, along with the obligation to move towards a managed transition to renewable energy sources, means this acquisition is especially timely.

The introduction of renewable energy into Seriti’s existing portfolio of high-quality coal assets will provide long-term financial stability and diversification whilst embracing alternative energy sources and helping to secure the country’s power needs.

“This acquisition is a significant landmark on Seriti’s journey to becoming a diversified energy business and supports our ESG objectives and commitment to a just energy transition,” said Mike Teke, CEO of Seriti.

Seriti uses 750 GWh of electricity in the process of mining the coal that is used to fuel power stations. In line with the commitments made in the MOU signed in October 2021 with Eskom and Exxaro, Seriti will start using renewable wind and solar energy in its own facilities through the signing of PPA’s in 2023.

“We need to be moving towards a lower carbon future through investing capital from coal into green energy. It is not only the right thing to do, but it makes business and societal sense,” said Teke.

Seriti is proud to be partnering with Standard Bank, RMB, Ntiso Investment Holdings and Peter Venn. Seriti is confident in the strength of Windlab Africa’s experienced management team, led by Peter Venn, who will continue to develop and grow the business.  The entry of Seriti and its partners into the renewables sector signals a clear shift – a proudly black-owned, South African company making a meaningful contribution to a reduced carbon footprint and just transition.

“Since commencing operation in Africa 14 years ago, Windlab’s aim has been to assist in the electrification of the region through the construction and operation of high-quality wind and solar renewable energy facilities. With African ownership and local capital, the business will now be able to accelerate the development of its significant pipeline to assist in alleviating the electricity shortages on the African continent,” said Windlab CEO John Martin.

“Standard Bank is proud to be an equity partner, funder and sole adviser to Seriti in delivering on its integrated energy strategy through the acquisition of Windlab – a renewable energy company with an established track record. We believe that the complementary skills of the management teams will provide a timely acceleration to deliver a diversified and more reliable energy supply for South Africa,” said Mark Buncombe, Head Mining and Metals.

Head of Infrastructure Equity Finance and Investments at RMB, Kwabena Malgas, commented: “An exciting opportunity to partner with Seriti, a key client and long-term partner of RMB. Seriti has always been at the forefront of solutioning for South Africa’s energy crisis. The acquisition of the Windlab Africa platform is complementary to their business and will ensure that they continue to reduce the country’s energy deficit through various renewable sources”

Transaction details

The transaction, with a total purchase price of R892 million (USD 55 million), will see Seriti acquire a 51% controlling interest in Windlab Africa – with RMB (14.5%), Standard Bank (14.5%) and two individual partners, Mr Peter Venn (15%) and Ntiso Investment Holdings (5%) collectively taking up the remaining stake.

Windlab, as acquired by Seriti, is currently overseeing 3.5 GWs of renewable energy projects at different stages of development in South Africa and east Africa and will continue to be managed by current Managing Director Peter Venn and the Windlab Africa team.

This acquisition gives Seriti access to a portfolio of existing world-class renewable assets with a high return rate, a promising project pipeline and a highly experienced management team.

For further information:

NOTE FOR EDITORS

About Seriti:

Seriti Resources Holdings is a broad-based, 91% black-owned and controlled coal mining company.

Seriti’s subsidiary, Seriti Coal operates three large-scale, opencast and underground thermal coal mines – the New Vaal, New Denmark and Kriel collieries, which respectively supply Eskom’s Lethabo, Tutuka and Kriel power stations. The New Largo mine is currently under development, to meet the needs of the adjacent Kusile power station.

On 1 June 2021, Seriti acquired the operations of South 32 SA Coal Holdings Proprietary Limited (SAEC) from South32, bringing into the fold four additional mines – Khutala, Klipspruit, and Middelburg Mines Services (MMS), which provide coal to the Kendal and Duhva power stations, as well as export coal via the Richards Bay Coal Terminal.

Seriti is co-owned by four anchor shareholders – Masimong Group Holdings (Masimong), Community Investment Holdings (CIH), Zungu Investments (Zico) and Thebe Investment Corporation (Thebe). It is Seriti’s philosophy that 10% of the equity in its mining operations be ring-fenced equally for the benefit of employees and communities through established unencumbered employee and community trusts.

In November 2021, Seriti announced the formation of Seriti Green, a subsidiary that would seek and develop renewable energy projects as an integral part of Seriti’s energy portfolio.

As a responsible South African coal miner, Seriti has a proven track record in the acquisition, operation and development of large-scale opencast and underground coal mines. Guided by an experienced board and management teams, Seriti maintains a principal focus on its long-term commitment to the domestic market and, in particular, the reliable and cost-effective provision of coal to Eskom.

Further information on Seriti can be found at www.seritiza.com

About Windlab Africa:

Windlab Development South Africa and Windlab East Africa, collectively known as Windlab Africa consists of 23 projects (3.5GWs) at different stages of development.

Windlab Africa utilises the industry-leading atmospheric wind modelling and energy analysis tool, WindScape, giving the business a competitive advantage and rapid growth potential. Among its portfolio, are two successfully completed wind projects in South Africa along the West Coast and the Amakhala Emoyeni wind farm in the Eastern Cape.

The Windlab Africa track record includes the development of 1 300 MW projects to start construction in South Africa, over the next six months, located in the Western Cape, Eastern Cape and Mpumalanga and an additional 2 000MW developmental pipeline in Mpumalanga.

Two additional development projects in the Africa portfolio are the Miombo Hewani a     300 MW wind farm in Tanzania and the Meru County 120 MW Energy Park in Kenya

Further information on Windlab can be found at www.windlab.com

About RMB:

Rand Merchant Bank (RMB) is a leading corporate and investment bank and part of one of the largest financial services groups (by market capitalisation) in Africa – FirstRand Limited. We offer our clients innovative, value-added advisory, funding, trading, corporate banking and principal investment solutions.

As the corporate and investment banking arm of FirstRand, we have access to a network of banks in 10 African countries, as well as representative offices in Kenya, Angola and China, and branches in the UK and India.

Further information on RMB can be found at www.rmb.co.za

About Standard Bank:

Standard Bank South Africa is the largest operating entity of Standard Bank Group, Africa’s largest bank by assets. Standard Bank Group reported total assets of R2.7 trillion (about USD167 billion) on 31 December 2021, while its market capitalisation was R229 billion (USD14 billion).

In South Africa, Standard Bank provides the full spectrum of financial services. Its Corporate & Investment Banking (CIB) division serves a wide range of requirements for banking, finance, trading, investment, risk management and advisory services. CIB delivers this comprehensive range of products and services relating to investment banking; global markets; and global transactional products and services.

For further information, go to http://www.standardbank.co.za

Ntiso Investment Holdings:

Ntiso Investment Holdings (Ntiso) is an investment holding company that seeks to attain sustainable, long-term capital growth across its portfolio; through maximising opportunities presented by the growth in trade and economic transformation in the Southern African region.

The company established a portfolio through its maiden investment in Puma Energy South Africa (Puma Energy), a midstream and downstream oil company that is majority owned by Trafigura in July 2021.

Ntiso’s investment aspirations span across three sector pillars, namely: Mining services & Energy, Financial Services and Transport & Logistics. Ntiso is led by its Founder and Executive Chairman, Mcebisi Jonas, and Phakama Mbikwana and Rustum Mohamed as Executives.