South Africa’s solar leasing platform Sun Exchange has launched plans for expansion in Zimbabwe, providing power and storage for an agricultural exporter.
Sun Exchange will provide a 1.9 MW solar plus storage project for Nhimbe Fresh. The project will be cheaper than the Zimbabwean company’s current diesel generators, cutting energy costs by 60% per year. It will also cut carbon emissions by more than 1 million kilograms per year.
“The cost of energy is one thing, but the cost of not having energy is another thing,” Sun Exchange’s CEO Abe Cambridge told Energy Voice. Without electricity, Nhimbe Fresh cannot continue operations.
Sun Exchange’s offering is “zero risk, zero hassle. It cuts costs from diesel and ensures operations continue”, he said. “Solar and storage makes sense in a commercial setting if you have a cost of not having energy.”
The company will provide power in three phases. The first phase will support operations at the Nhimbe Fresh packhouse and cold store facilities. The second phase will go to the pump sites and the third phase to Churchill Farm. Sun Exchange will integrate the three sites with a 3.9 MWh battery.
Mission focused
Nhimbe Fresh’s chairman Edwin Masimba Moyo said that solar power with Sun Exchange would drive the company’s vision of pursuing “a purpose greater than ourselves and to pioneer new, profitable ways of doing business through sustainability and environmental responsibility”. The solar project will minimise “our energy costs and climate impact, while strengthening our resilience and business continuity by enabling us to continue operations during power outages”.
Sun Exchange closed a Series A funding round earlier this year, raising a $3mn investment from ARCH Emerging Market Partners.
Cambridge noted that one of the goals of the funding was to grow Sun Exchange geographically, beyond South Africa. Supporting agriculture is in line with the company’s sustainable development goals.
“Agriculture is the largest employment sector in Africa, with 65% of jobs in Zimbabwe linked to the industry. In terms of our social mission, I couldn’t think of a better place to do it,” he said. The country’s grid is unreliable, driving up diesel generator use.
A number of countries have imposed sanctions on Zimbabwe. Sun Exchange has taken steps to mitigate risk, though. The company’s counterparty is in Botswana and the power agreement is priced in US dollars. Furthermore, Nhimbe Fresh has received support from Old Mutual Investment Group in a 2019 bond issue. The government has also voiced support for the project.
Cambridge said the return for investors in the Nhimbe Fresh project would be around 12.5%, escalating at 3.5% per year. As with Sun Exchange’s South African projects, investors can receive payments in rand or bitcoin.