SOUTH AFRICA: Chariot Announces Significant Financing Completed for Projects
Chariot Limited has confirmed that it has completed a significant financing and a strategic equity partnership primarily to fund its investment in two wind generation projects, Zen and Bergriver, in South Africa, which have just reached financial close. As announced separately today, these Projects are being led by Acciona Energia, the largest pure play renewable energy company in the world, with construction to commence imminently. Chariot has incorporated a new subsidiary, Chariot Generation and Trading Pty Limited to consolidate its energy and trading operations in South Africa, as well as to enable this financing. Chariot Generation and Trading now holds a 24% stake in these Projects, as well as a 34% effective economic interest in Etana Energy (Pty) Limited the South African electricity trading platform. Post commissioning, anticipated in mid-2027, Chariot will receive revenue streams both from the generation of electricity from these Projects and from the subsequent trading of this power through Etana.
Transaction highlights:
• Financing package consists of project finance debt combined with third party equity investment and mezzanine debt, with no dilution at the Chariot Limited parent company level, being:
o US$284 million gross long-term non-recourse project finance debt provided by Standard Bank and Investec at the Projects’ level (Chariot Generation and Trading’s stake 24%)
o US$17 million strategic cash equity investment from the Mahlako Energy Fund I, managed by Mahlako A Phahla Financial Services, a highly respected South African fund manager, following which Chariot holds a 65% stake in Chariot Generation and Trading, with the Mahlako Fund holding the remaining 35%
§ Use of the Mahlako funding includes financing the construction of the Projects, the development of potential future wind and solar projects in South Africa and working capital o US$9 million non-recourse mezzanine debt provided by Standard Bank in respect of Chariot Generation and Trading’s holdings in the Projects
Adonis Pouroulis, CEO of Chariot, commented: “We are delighted to have completed this financing which is multi-layered but carefully structured to enable our first entry into wind generation assets, a key part of our long-term plan as we continue to build our Renewable Power business. We now own a sizeable portion of two utility-scale infrastructure projects, all funded at the subsidiary level, and we are very pleased to welcome Mahlako as co-investors into this business. They are a highly regarded South African-focused investor and we look forward to working with them on these and further projects where we see material growth and potential. I would also like to thank Standard Bank and Investec for their support and we look forward to providing updates on progress.”
Makole Mupita & Meta Mhlarhi, Founders of Mahlako added: “We are pleased to join Chariot, Acciona Energia and H1 in delivering the Zen and Bergriver wind farms. This investment marks an important milestone for Mahlako as we expand our exposure to the emerging licensed electricity trading market, which we believe will play a critical role in South Africa’s energy future. We look forward to partnering with Chariot as the projects move into construction and as new opportunities in renewable generation and trading continue to grow.”
Key Deal Terms: Equity Investment
• A new subsidiary, Chariot Generation and Trading, has been incorporated and is now owned by Chariot 65% and Mahlako 35%. Chariot and its team will continue to manage both the existing and future investments of Chariot Generation and Trading
• Chariot Generation and Trading’s assets include:
o US$18 million (ZAR 296 million) cash received through the issue of an equal number of ordinary and redeemable preference shares to Mahlako (ZAR 290 million) and a further issue of ordinary shares to Chariot (ZAR 6 million) o 24% holdings in each of the Zen and Bergriver wind projects
o 34% effective economic interest in Etana
o Potential future wind and solar generation projects in South Africa
• Chariot Generation and Trading’s cash will be used:
o To fund its share of the Projects combined with additional funds from mezzanine debt and project finance o To cover Chariot’s related re-charged overheads
o For other working capital requirements and potential subsequent renewable generation projects in South Africa Mezzanine Debt
• US$9 million (ZAR 150 million) non-recourse mezzanine debt provided by Standard Bank, secured against Chariot Generation and Trading’s holdings in both the Projects Project Finance Debt
• Gross US$284 million (ZAR 4.8 billion) (net US$68 million (ZAR 1.2 billion) attributable to the 24% share of Chariot Generation and Trading) non-recourse project finance debt provided by Standard Bank and Investec at the Project level