CSP players called for “greater certainty from government” at CSP Today South Africa 2015

As reported by South Africa-based digital magazine engineeringnews.co.za last week at the CSP Today South Africa 2015 conference, “players in the CSP market see much opportunity for the industry” in the country. “But they have called for greater certainty from government on its Integrated Resource Plan (IRP) update, which advocated for an increase in the current CSP allocation from the current 1,200 MW to 3,300 MW by 2030 and 8,100 MW by 2050.

The publication quoted Louis van Heerden, president of the Southern Africa Solar Thermal and Electricity Association (Sastela), saying that “CSP has the potential for large-scale manufacturing, industrialisation and localisation”. He added that “CSP had become increasingly cost-effective compared with conventional energy.” Furthermore, he stated that “CSP will allow South Africa to introduce much-needed baseload and peak power into the grid within a short space of time."

Another speaker, Julián López Garrido, general manager of the recently inaugurated KaXu Solar One CSP plant, indicated the plant had “outperformed its targets so far” but called for “a compromise from the government to help the solar CSP industry develop local skills.”

Acciona considers listing renewable business in Europe

According to confidential sources cited in a Reuters report last week, the Spanish company is considering listing its renewable energy business in Europe, instead of the United States as it had originally planned.

In June 2014, private equity firm KKR acquired a one-third stake in Acciona's international wind farms arm with a view to jointly list a so-called "yieldco" in the US in the first half of 2015.

Other Spanish companies have pooled their renewable energy assets in investment vehicles called “yieldco” companies, which guarantee a stable cash flow that can be paid out in dividends.

However, conditions have changed since then, with interest rates and the cost of capital falling in Europe and rising in the United States, making a U.S listing less attractive, sources told Reuters.

The company has a net generating capacity of around 2,200 megawatts including wind, photovoltaic and thermosolar plants in 11 countries including the United States, Mexico, Canada, Australia, Italy, Portugal, Poland and South Africa.

Abengoa pays high price for bond market return, says Reuters

As reported by the financing news portal, Abengoa started marketing a EUR 375 million bond with a 7.5% - 7.75% coupon, which is “substantiality higher than the coupon on its previous deal.” Despite the company’s efforts, however, the deal came with a 7% coupon but at a cash price of 97.954 to yield 7.50%.

The company announced the new trade, a five-year bond, on Monday. HSBC and Citigroup were global coordinators, while Bankia, Credit Agricole CIB, Morgan Stanley, Natixis, Santander and Société Générale were passive bookrunners.

According to confidential sources cited by Reuters, "the 7.5% level was appropriate." Other market commentator added that "the pricing isn't a talking point. I think that it's Abengoa's ability to access the market that is the real success of the story."

Goldman Sachs labels South Africa as an attractive investment destination

According to the Miningweekly magazine, Colin Coleman, managing director at Goldman Sachs International, said during a conference celebrated last week that “South Africa has two times market cap to GDP, which reflects the liquidity and sophistication of the Johannesburg Stock Exchange (JSE), which is a very favourable destination to fund managers.”

Besides, the local conditions in other emerging markets such as Brazil, Latin America, Turkey, the Middle East and Russia, which are being depicted as “unattractive destinations for institutions in the short term,” are likely to have a positive impact in South Africa.

“We have sub-Saharan Africa at our backs, emerging market scarcity pointing to South Africa and the JSE, and very well run and governed companies being the platform for playing that growth,” said Coleman.

The investment bank puts the country’s economic growth expectations at 2.3% in comparison to South African Treasury’s 2% forecast.

“The fact is South Africa should be a 3.5% growth rate because that is the country’s real base capacity,” he added. “If South Africa just did the basics right, it would grow at 5%, and if it really excelled and produced a perfect performance, it would be at 7%,” he concluded.