RMB invests in private power through Remgro partnership

MEDIA RELEASE

22 March 2023

RMB partners with Remgro to grow private electricity trader

Rand Merchant Bank (RMB) has acquired a 25% shareholding in Remgro’s Ubiquity Energy platform, a strategic energy focused investment vehicle. Ubiquity is the holding company of Energy Exchange of Southern Africa (Energy Exchange). This transaction aligns with both business’ commitment to invest in the private power market to unlock the vast potential of South Africa’s natural renewable resources.

Energy Exchange is a NERSA licensed electricity trader, offering corporate customers an attractive, renewable, alternative source of electricity produced by independent power generators.

“As a large-scale purchaser of electricity from generators of power, Energy Exchange is a key enabler in the private power landscape, connecting South African corporates to privately produced, renewable energy. In addition to helping corporates meet their de-carbonization goals, Energy Exchange will supply a bespoke energy profile to match their unique consumption requirements. This will be done while solving for a balance in competitive pricing, long-term price certainty and flexible contract tenors,” said Sindisiwe Mosoeu, Infrastructure Sector Solutions transactor at RMB. 

Energy Exchange will provide corporates with the ability to blend different sources of electricity to create a tailored energy profile. Buyers will be able to rely on energy sources such as wind, solar, biomass and hydro, which on a blended basis matches their needs more accurately, rather than just relying on a single source.

RMB Principal Investments transactor, Philip De Villiers, said: “RMB is proud to partner with Remgro and the Energy Exchange team in our shared vision to connect businesses to renewable energy. The generation, and provision, of sustainable privately produced power is critical to solving our energy challenges, but it’s also a fast-evolving and complex industry. The South African market requires a material shift in the way electricity is produced, sold, and consumed and will need bold thinking and innovative solutions. South Africa already has both the natural resources and the capability to address our current energy constraints and, at RMB, we are deeply committed to going the extra mile to enable the development of this industry.”

Pieter Uys, Strategic Investments Executive at Remgro said: “Remgro has been developing Energy Exchange over the last five years and has built a strong pipeline on both the supply and demand side of the electricity trading business. Remgro believes very strongly in partnerships and is very pleased to join forces with RMB to open up and grow the private power market in South Africa.”

Importantly, the electricity tariffs charged by Energy Exchange are competitive and escalate at inflation, providing a predictable and stable cost estimate for corporates.

“The platform offers the benefit of aggregation, allowing multiple customers to access scale benefits in procuring energy. In turn, large power generators are able to negotiate with a single centralised electricity buyer,” Uys concluded.

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Note to editors

Remgro, FirstRand and RMB have a long and successful partnership stretching over decades. This includes Remgro’s material direct and indirect shareholding in FirstRand, until its unbundling of RMH in 2020, with the latter investment also spawning notable companies including Momentum Metropolitan, OUTsurance and Discovery. In addition, the relationship includes advisory and balance sheet support by RMB to Remgro and several of its material portfolio companies including, inter alia, Distell, Mediclinic, RCL Foods, Community Investment Ventures Holdings, (CIVH) and Siqalo Foods.  This complimentary partnership to support Energy Exchange will combine Remgro’s proven track record of building fast growing, strong cash generating, long term businesses with RMB’s private power financing expertise, risk management capability and the bank’s ability to deliver innovative solutions to its client set.

About Remgro

Originally established in the 1940s by the late Dr Anton Rupert, Remgro’s investment portfolio has evolved substantially since then and currently includes investee companies across nine platforms. The Company is listed on the Johannesburg Stock Exchange (JSE), operated by the JSE Limited in South Africa under the “Financials – Financial Services – Investment Banking and Brokerage Services – Diversified Financial Services” sector, with the share code “REM”. From 3 January 2022, the Company also has a secondary listing on the A2X. Remgro’s interests consist mainly of investments in the healthcare, consumer products, financial services, infrastructure, industrial and media industries. Remgro’s most significant investments are as follows: Mediclinic International plc (Mediclinic) (44.6% interest), OUTsurance Group (30.6% interest), Community Investment Ventures Holdings Proprietary Limited (CIVH) (57.0% interest), Distell Group Holdings Limited (Distell) (31.7% interest), RCL Foods Limited (RCL Foods) (80.2% interest), Siqalo Foods Proprietary Limited (Siqalo Foods) (100.0% interest), FirstRand Limited (FirstRand) (2.2% interest), Discovery (7.8% interest), Air Products South Africa Proprietary Limited (Air Products) (50.0% interest), TotalEnergies Marketing South Africa Proprietary Limited (TotalEnergies) (24.9% interest) and Kagiso Tiso Holdings Proprietary Limited (KTH) (43.5% interest). These investments contribute approximately 85% to Remgro’s intrinsic net asset value (INAV after tax). Ubiquity Energy is a newly formed energy focused holding company with interests in two independently managed entities: Energy Exchange of Southern Africa Proprietary Limited (100%), a NERSA licensed electricity trader and Enerweb Proprietary Limited (51%), an energy sector focused software solutions and analytics business.