SOUTH AFRICA – Royal Dutch Shell, a multinational oil & gas company is set to purchase African solar provider, Daystar Power, as it expands its global renewables footprint and seeks to work towards its carbon emission reduction policy.
Shell is one of the most influential oil producers in Africa, but the Daystar purchase is its first power acquisition on the continent, underscoring its mandate to cut its greenhouse gas emissions massively by 2030.
“As we do this, we’re helping to address a critical energy gap for many who currently rely on diesel generators for backup power,” Shell’s Vice President for Renewable Generation, Thomas Brostrøm, said in a statement.
Founded in 2017 by the African venture builder Sunray Ventures, Daystar is taking advantage of inadequate electricity supply and high diesel costs to offer cheaper renewable solutions on the continent.
It has 300 power installations with an installed solar capacity of 32 megawatts but aims to boost its capacity to 400 MW by 2025.
In his comments, von Hardenberg said his company needed to raise more money to meet growing demand but opted to sell to Shell due to the latter’s strong balance sheet and “long history in Africa.” Both parties started discussing a potential deal in 2019, it was learnt.
Pending regulatory approvals, Shell will fully own Daystar, but von Hardenberg and the management team will continue to run the company.
The Nigeria deal will enable the company to deliver carbon emission reductions and power cost savings to commercial and industrial businesses across Africa, according to an emailed statement from Daystar.
The cash inflow from Shell will help Daystar increase its installed solar capacity to 400mw by 2025 from 32mw and also expand services beyond Nigeria to East and Southern Africa where it is seeing increasing demand from South Africa, von Hardenberg, chief executive and co-founder, said in an interview.
The Lagos-based solar firm had said earlier this year that it is in discussion with financiers to raise as much as US$100 million by next year to fund its expansion plans after demand surged in Nigeria.