Tata Power arm sells stake in South African JV Cennergi for $106 mn

Tata Power Co. Ltd Tuesday said it will exit a South African wind power joint venture by selling its entire stake to a local partner for $106 million. Cennergi (Pty) Ltd, which owns two wind power farms totalling nearly 230MW, is an equal joint venture between Exxaro Resources Ltd, a leading South African coal producer, and Khopoli Investments Ltd, a subsidiary of Tata Power. After the transaction, Exxaro will own 100% of Cennergi. “Under the agreement, Exxaro will acquire the entire 50 per cent shareholding of Khopoli Investments. The agreement is likely to be completed by the third quarter of this fiscal. Post this transaction, Exxaro will have 100 percent ownership of Cennergi,” the company said in a statement. The agreement will be subject to normal regulatory approvals customary for the transaction. Cennergi owns two wind farms in South Africa - Amakhala Emoyeni, having a capacity of 134.4 MW and 95 percent shareholding, and 95.3 MW Tsitsikamma Community with a 75 percent shareholding. Each project has a 20-year PPA with the state power utility Eskom. “The decision to monetise this South African asset is in alignment with our stated strategy to deleverage the balance sheet by divesting sub-optimal size international assets,” Tata Power CEO and Managing Director Praveer Sinha said. He also said that the proceeds from the sale would be re-invested in emerging areas where there is a huge growth opportunity. “The collaboration between Exxaro and Tata Power over the past seven years to develop these projects to their current status has been commendable and an outstanding success in South Africa’s implementation of its energy strategy. As a South African-based company, Exxaro is pleased with this opportunity to consolidate its interest in this renewable energy asset at a time in South Africa where we need energy security as we respond to increasing negative sentiment towards coal-based electricity generation," said Mxolisi Mgojo, CEO of Exxaro Resources. 

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