Mergers & Acquisitions

Starsight Energy and SolarAfrica to become one

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Earlier this month, Starsight Energy and SolarAfrica have announced their merger to transform into one of the largest commercial and industrial (C&I) solar developers in Africa. The former has a regional footprint in East and West Africa, while the latter is mostly present in South Africa.

The merger will notably result in the establishment of a pan-African renewable energy services provider, focused on rooftop to large-scale solar projects and backed by Helios Investment Partners (Helios) and African Infrastructure Investment Managers (AIIM).

The merged entity will comprise a portfolio of over 220MW of operated and contracted generation capacity, and 40MWh of operational battery storage, with an additional generation pipeline exceeding 1GW.

Substantial funding is expected to be allocated to South Africa, where new regulations have recently permitted wheeling and self-generation of up to 100 MW by private generators.

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Shell acquires West Africa’s leading provider of hybrid solar power solutions

Shell has revealed its intention to acquire Daystar Power in a bid to deliver carbon emission reductions and power cost savings to commercial and industrial (C&I) businesses in Africa. The acquisition is expected to help Daystar Power further expand beyond West Africa and into East and Southern Africa, and help grow its installed capacity to 400 MW by 2025. Africa’s solar C&I segment has witnessed significant demand in recent years, supporting the growth of several African renewable energy solutions providers. Earlier this month, AIIM and Helios-backed Starsight Energy agreed on its merger with SolarAfrica to develop a pipeline of some 1 GW of C&I projects across the continent. Shell has sought to increasingly tap into Africa’s power market while divesting from some key oil assets, especially in Nigeria. At the end of 2021, it notably launched a Shell Energy Nigeria with the aim of delivering competitive and reliable energy for power generation and industrial users via gas distribution networks.

Cameroon’s SONARA restructures commercial debt with Vitol

Cameroon’s SONARA, which operates Central Africa’s biggest refinery, has reached a deal with oil trader Vitol to restructure its commercial debt. The deal had been in the making for some time as the state-owned refining company seeks to restructure its debt, which amounted to 3% of GDP and 6.6% of total public and publicly-guaranteed debt at the end of 2020. SONARA’s 42,000 barrels per day (bpd) refining facility has been offline since a fire destroyed several of its units in 2019. In October 2021, the company had already managed to reach a revised agreement with local banks to restructure its debt amounting CFAF 261 billion, to be repaid over 10 years with an interest of 5.5% per year. It had since then focused on reaching similar agreements with international lenders. SONARA’s debt to Vitol amounts to some $279m, which it will be repaid under the same terms (10-year period, 5.5% interest rate). The deal paves the way for the negotiations of similar arrangements with the other international lenders. Meanwhile, these successful agreements over the restructuring of SONARA’s debt have paved the way for the refinery’s rehabilitation. In April 2022, Presidential approval had been given for the refinery’s rehabilitation and restructuring under a public-private partnership (PPP), according to a letter consulted by Hawilti.