Reatile Group and African Infrastructure Investment Managers (AIIM) have teamed up to buy a 30% stake in a pipeline in Mozambique for up to ZAR5.14bn (€300.8m) from Sasol South Africa.
The Reatile-AIIM consortium has agreed to pay an initial ZAR4.14bn for the stake in the Republic of Mozambique Pipeline Investments Company (ROMPCO) and will make deferred payment of up to ZAR1bn, payable if certain agreed milestones are achieved by 30 June 2024.
Sasol will retain a 20% shareholding in ROMPCO and will continue to operate and maintain the pipeline. The other existing shareholders in ROMPCO are the South African Gas Development Company and Companhia Moçambicana de Gasoduto, which are both state-owned companies of South Africa and Mozambique, respectively.
ROMPCO owns and operates the 865km high-pressure gas pipeline connecting the Pande and Temane gas fields in Mozambique with South Africa. The ROMPCO pipeline supplies gas to five offtake points in Mozambique and is the primary supply channel for natural gas into South Africa.
The proposed transaction paves the way for further capital raising and investment in the ROMPCO pipeline to facilitate the crucial expansion of imports.
Simphiwe Mehlomakulu, chairman of Reatile, said: “This is a landmark transaction that broadens participation in the South African energy sector and highlights Reatile’s leading role in it. We are excited by the economic potential of increased gas supply to the region and stand ready to support ROMPCO’s long-term expansion potential.”
Vuyo Ntoi, managing director of AIIM, said: “Whilst the lion’s share of our investments are channelled into renewable energy, the switch from old to new is not always possible with just one step. Our ambition is to assist South Africa in meeting its obligations under the Paris Agreement, and we see gas as a key component in the process of transitioning across to clean energy.
“As a lower carbon-emitting fuel than coal, gas offers dispatchable power at a reasonable cost until energy storage systems are better optimised to fully utilise renewable energy, making it an important transition fuel.”
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