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Billionaire Patrice Motsepe pushes ahead with major renewable energy project

African Rainbow Energy & Power’s Patrice Motsepe. | Leon Nicholas African News Agency (ANA)

African Rainbow Energy & Power’s Patrice Motsepe. | Leon Nicholas African News Agency (ANA)

Published Jun 14, 2022

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Local billionaire Patrice Motsepe is looking to boost renewable power generation sevenfold to become one of the biggest clean electricity providers on the continent.

Motsepe’s African Rainbow Energy & Power (AREP) will aim to add as much as 5 000 megawatts of generation and has already invested in more than 700 megawatts. The company is searching for partners to help generate an additional 2 000 megawatts by the end of June next year.

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The recent change in legislation that allows independent power producers to set up projects that generate as much as 100 megawatts without needing a licence has provided a recent boost for AREP.

“We’ve always thought we should build upscale” and create a significant energy company, said AREP chief executive officer Brian Dames.

The “build-up in scale” included participating in projects that were funded through government auctions in South Africa to buy power and generate electricity for commercial usage. The firm also intends to function as an independent power operator.

Dames, an ex-CEO of state-owned utility Eskom, joined Motsepe in 2014 to become the first head of the energy company with a focus on renewables. There was a significant delay in the auctioning of renewable generation due to the plans to build new nuclear power plants pushed forward by the then presidency of Jacob Zuma.

“There was a lot of time to explore,” Dames said. Solar assets generate most of AREP’s current power with wind generating about a third and a small portion generated by biomass.

“The company has shared a keen interest in the secondary market that’s set to open up and which could potentially include energy trading,” said Dames.

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Last year the company formed a joint venture with Absa, that together controlled up to R6.5 billion of renewable assets, creating the African Rainbow Energy Fund.

In May, South Africa registered two massive renewable energy projects, two solar stations which generate 100 megawatts each, to cut red tape and help increase the pace of private generation by not requiring a licence. The projects are being developed in the North West province by Sola Group, of which AREP is a 40% shareholder.

“Lifting the cap on the licence exemption has dramatically changed the landscape for private generation,” Dames said. “Grid access remains one of the biggest challenges for South Africa to add more renewable energy.”

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AREP’s holding company, Motsepe’s Ubuntu-Botho Energy Holdings Proprietary Ltd., is a partner in Breakthrough Energy Ventures, an initiative started by Bill Gates focused on reaching net-zero emissions globally.

“After reaching a target of 5 000 megawatts of capacity, AREP would start a strategy on how to expand the business around energy trading, the power grid, storage solutions and other opportunities on the continent,” said Dames.

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