Decentral Raises $12.1 Million to Expand Solar Energy Portfolio in South Africa

Decentral Energy Managers, a South African power producer, has raised $12.1 million of equity to expand its solar energy portfolio in the country. The renewable energy firm, co-led by Christian Bode and  Luel Culwick, finances and builds solar energy projects for the commercial and industrial (C&I) sector in the country.

Decentral Energy Managers has completed its first financial close. The investment consists of equity from the South African firms Flyt Property Investment and Anuva Investments. Investment banking firm Lion’s Heads Global Partners (LHGP) provided advisory services in the deal with support from the Power Africa initiative of USAID.

For the last decade and a half, South Africa has been facing an energy crisis due to the aging infrastructure and challenges within the state-owned utility Eskom. Renewable energy is proving to be the foremost solution in improving the country’s energy security, but weak macroeconomic conditions are stalling the significant increase in clean energy capacity.

Against this backdrop, Decentral Energy has raised 12.1 million in funding from these investment firms and development platforms, with an aim of increasing the renewable energy growth in the country. The company will use the investment to increase its renewable energy generation capacity to 45-50 MW to meet the demand from small and mid-sized C&I off-takers in the South African market.

The wheeling strategy (selling power to third-party companies via the grid) of Decentral Energy is intended to push the energy sector forward in its efforts to relieve the overburden of electricity provision on Eskom. According to Luel Culwick, a lessen reliance on the national grid and considerable carbon footprint reductions will benefit customers from substantial energy cost savings.

The recent investment is expected to contribute to the decarbonization of the energy sector by reducing over 328,000 tons of carbon dioxide emissions for a year which is equivalent to taking 70,000 cars off the road. Currently, Decentral Energy Managers has 10 MW of installed solar energy capacity across South Africa and nearly 500 MW of assets under development, as claimed by the company.