“East African corporate solar power supplier GridX Africa is expanding to the Democratic Republic of Congo (DRC) and plans to ramp up its presence in Kenya, CEO Chalker Kansteiner tells The Africa Report.
The company will start supplying off-grid solar power to petrol stations owned by Cobil in Kinshasa in the next couple of months, Kansteiner says. The first stage involves supply to seven petrol stations, with a plan to add 20 more.
The use of digital pumps in Cobil’s petrol stations has made an uninterrupted power supply, which the grid can’t reliably supply, more crucial, Kansteiner says. A power outage while a customer is filling up a car means that the transaction can’t be measured or closed.
GridX has a total of 5.8 megawatts-peak (MWp) of solar PV and 4.2 megawatt hours (MWh) of battery energy storage systems installed or under construction. It operates mainly in Kenya, and also has projects in Tanzania and Mozambique. The company targets shopping malls, hotels, dairy farms and industries including cement and textiles. In more than 75% of cases, Kansteiner says, the company provides financing as well as the solar power system.
The main shareholders are New York-based Eden Renewables and the Pembani Remgro Infrastructure Fund, with Kansteiner having a ‘significant minority’ stake.
Some of the equipment for the DRC project will be sourced from China, and some will be prefabricated in South Africa. Logistics in the DRC are harder than in Kenya, Kansteiner says, and he wants to see proof that GridX can operate there before considering expansion. The contract with Cobil is for an initial six years, versus a standard 12 to 15 years for GridX’s Kenyan projects.
If the Kinashasa plan works out, GridX will consider expanding into other parts of the DRC, Kansteiner says.
Kenya Plans
Kansteiner used to work for Black Rhino, Blackstone’s Africa-focused energy and infrastructure developer. The large projects he worked on were often ‘politicised’ he says, and he wanted to avoid that and concentrate on supplying solar power to the private sector. The result was the establishment of GridX Africa, set up in 2017.
Prospects in Kenya have improved under President William Ruto, who took office in September, Kansteiner says. Ruto has shown a ‘market liberalisation mindset across the board.’ Ruto used his inauguration speech to call for an end to the world’s ‘addiction’ to fossil fuels. Kenya, where only about 1 million people had electricity in 1990, is committed to achieving 100% renewable energy by 2030.
GridX is considering opportunities to invest in Kenyan grid infrastructure and sell power directly to customers. The company in 2021 invested $7m into Kenya’s Two Rivers power company, which will supply power to Centum Real Estate’s 102-acre commercial and residential development in Nairobi. GridX is in ‘relatively advanced’ discussions in Kenya for two or three new projects, Kansteiner says.
The company has a project pipeline running into hundreds of millions, but Kansteiner is taking a gradual approach to fundraising. GridX is in advanced discussion over $10m of senior debt, which he hopes will be available in the next two months.
Kansteiner also wants to raise at least $10m of equity in the second half of the year.”
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Whitehouse, David. The Africa Report 30 Janaury 2023.