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Exxaro, China’s CNIC vie with AIIM for $2 billion African power firm Lekela

by Mike Robinson

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© Reuters.

Emma Rumney, Isla Bonny

JOHANNESBURG, (Reuters) – South African miner Exxaro is among the potential buyers for the last round of bidding on African renewable energy company Lekela Power – a company valued at around $2 billion according to Reuters sources.

    African Infrastructure Investment Managers (AIIM), an arm of Old Mutual, has advanced to the final stages alongside Exxaro, two sources said. Two sources also confirmed that CNIC is in the final round of bidding. Sources spoke anonymously.

Actis, a private equity firm, plans to sell 60% of its stake in Lekela. This was first reported by three sources last year. However, Mainstream Power, a 40% shareholder, is looking for cash as well. One source said that Citi had advised it.

According to Actis’ website, the value of Lekela with Mainstream, founded by Actis in 2015, is $1.9 billion.

Lekela is a developer of utility-scale, renewable energy projects in Africa. According to their website, it has 1.3 GW projects in Egypt Ghana South Africa, and claims to have built the first wind farm ever in Senegal.

According to two sources, AIIM, which is advised by Goldman Sachs, (NYSE:), was the top-ranked deal at the moment.

China Guangdong Nuclear Power, and the State Power Investment Corporation of China were both interested in bidding, according to one source. However, it wasn’t clear if they proceeded.

According to two sources, Shell (LON ) expressed an interest in purchasing the assets. Reuters had previously reported that Globeleq, a British power company owned by the British government had also considered bidding. The progress of either party was unclear.

Mainstream Power. AIIM. Lekela. Exxaro. Citigroup Shell and (NYSE:) declined comment. Globeleq, Goldman Sachs and China Guangdong Nuclear Power didn’t immediately reply to our requests for comment. CNIC, the State Power Investment Corporation and Globeleq could not be reached immediately.

Africa’s abundant wind, sun, and hydropower resources make it a fertile land for developing energy sources that don’t emit any planet-warming CO2. It could also be used to stabilize electricity grids plagued with routine blackouts.

Exxaro is the largest supplier of coal to South Africa’s Eskom state-run power utility Eskom. The company announced that last year, it would cease investing in new thermal coal assets. Now the company is attempting to move to cleaner business lines.

China is Africa’s top trading partner and has been heavily investing in Africa for years, according to International Institute for Sustainable Development.

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