Boston-Based Denham Capital announced this week that it will invest up to ZAR 1.5 billion (US$ 150 million) in BioTherm Energy, a South African developer, owner and operator of clean energy projects.
The opportunity for small scale, on-site generation in South Africa has grown significantly, according to the investment group, and BioTherm Energy has secured, and is continuing to develop, a substantial pipeline in waste gas co-generation, biomass and combined heat and power projects, many of which qualify for carbon credits under the Kyoto Protocol. These projects can generate electricity much more rapidly than conventional large-scale power projects, thereby providing needed relief to the South African power system.
“Denham Capital will provide the necessary equity capital for BioTherm Energy to develop, invest or acquire projects totalling approximately 300 MW, equivalent to the electricity needed to supply about 500,000 households," Dr. Louis van Pletsen, a Partner and Head of the London Office of Denham Capital, said. "Private sector investment from companies such as BioTherm Energy will be essential in addressing South Africa’s energy deficit.”
Commenting on Denham Capital’s investment, Buyelwa Sonjica, South Africa Minister of Minerals and Energy said, “Having opened BioTherm’s first plant just over a year ago, we are delighted with this substantial investment by Denham Capital, a major foreign investor, in a business that will generate more electricity in South Africa, contribute to the reduction of greenhouse gasses and create more clean energy jobs in the South African economy.”
The Minister opened the 4.2 MW biogas to power plant, based at the PetroSA facility in Mossel Bay, east of Cape Town, in September 2007. At that time, it was the first private sector renewable power generation project in Southern Africa funded under the Clean Development Mechanism (“CDM”) of the Kyoto Protocol, under which the project earns carbon credits because of its contribution to the reduction of greenhouse gasses. Under the European carbon-trading scheme these credits are in turn sold, primarily to European industries, which need to reduce the cost of their compliance liabilities.
BioTherm Energy is targeting energy intensive industries where industrial processes release significant amounts of waste energy both as heat and gasses. BioTherm Energy utilises this wasted energy to produce electricity and/or steam, which it sells to the host site or to third parties, including Eskom, the South African public electricity utility.
BioTherm Energy is also instituting multi-level sustainability in all of its projects through the participation of Black Economic Empowerment (BEE) partners and community- based development programs.
"Our investment in BioTherm reflects our strong belief in the potential for innovative solutions to the South African power crisis,” said Scott Mackin, a Partner at Denham Capital. “We are delighted to be working to develop this exciting and valuable business, with a highly skilled and committed management team with a proven track record. We believe BioTherm Energy is well positioned to deliver much needed additional clean and reliable power to the Southern African economy.”
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