Chariot Limited (AIM: CHAR) shares jumped around 10% after the company announced it has completed major financing for its two South African wind power projects, Zen and Berg River, both of which have now reached financial close.
Chariot has set up a new subsidiary, Chariot Generation and Trading, which will hold a 24% equity stake in the wind projects and a 34% economic interest in the Etana Energy electricity trading platform.
The funding package comprises US$284 million of project finance debt provided by Standard Bank and Investec, a US$17 million strategic equity investment from the Mahlako Energy Fund, and US$9 million of mezzanine debt from Standard Bank.
Once the projects are commissioned, expected in mid-2027, Chariot will begin generating revenue from power production and from trading electricity through Etana. The company said the structure avoids any dilution at the parent company level.
Transaction highlights:
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Financing package consists of project finance debt combined with third party equity investment and mezzanine debt, with no dilution at the Chariot Limited parent company level, being: |
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US$284 million gross long-term non-recourse project finance debt provided by Standard Bank and Investec at the Projects’ level (Chariot Generation and Trading’s stake 24%) |
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US$17 million strategic cash equity investment from the Mahlako Energy Fund I (the “Mahlako Fund”), managed by Mahlako A Phahla Financial Services (“Mahlako”), a highly respected South African fund manager, following which Chariot holds a 65% stake in Chariot Generation and Trading, with the Mahlako Fund holding the remaining 35% |
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Use of the Mahlako funding includes financing the construction of the Projects, the development of potential future wind and solar projects in South Africa and working capital |
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US$9 million non-recourse mezzanine debt provided by Standard Bank in respect of Chariot Generation and Trading’s holdings in the Projects |
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Adonis Pouroulis, CEO of Chariot, commented:
“We are delighted to have completed this financing which is multi-layered but carefully structured to enable our first entry into wind generation assets, a key part of our long-term plan as we continue to build our Renewable Power business. We now own a sizeable portion of two utility-scale infrastructure projects, all funded at the subsidiary level, and we are very pleased to welcome Mahlako as co-investors into this business. They are a highly regarded South African-focused investor and we look forward to working with them on these and further projects where we see material growth and potential. I would also like to thank Standard Bank and Investec for their support and we look forward to providing updates on progress.”
