PELE ENERGY GROUP - INSPIRED BY A VISION FOR STRUCTURAL CHANGE

South Africa’s Pele Green Energy (PGE) was one of 28 inaugural IPPs to be granted a power generation license in 2011.  With a narrative of entrepreneurship, innovation and tangible impact, Gqi Raoleka, MD of Pele Green Energy, spoke to EnergyNet about the journey.

 

Pele is 15 years old this year, tell us about your journey as an IPP in South Africa. 

Pele Energy Group (PEG) is an independent power producer whose focus transcends renewable energy and is centred on structural change within the lives of the members of the communities that our power plants operate in. We develop, own, and operate over 2GW of renewable energy through our renewable energy subsidiary Pele Green Energy, and we provide research-led development in the environment of our power plants through Knowledge Pele. PEG owns both subsidiaries 100%. 

Pele Energy Group was founded with the intention to drive large-scale structural change. Today it contributes to change by increasing energy supply, by developing, owning and operating renewable energy generation facilities and increasing economic participation. 

 

The background story 

Pele Energy Group was founded by five young Africans whose sole emphasis and focus at the time in 2009 centred around youth regeneration and development. As black South Africans born in the 1980’s, we were clearly mindful and aware of the relative privilege in our own personal lives and upbringing in comparison to the majority of young black South Africans. We have defined this awareness of our relative privilege as our “Justice Dividend”. Our primary driver for starting an enterprise was to share this Justice Dividend. 

We spent the 2009 year establishing partnerships and relationships with municipalities who we were targeting to help solve their youth unemployment issues. It was through our deep, meaningful social work with municipalities in the Free State that we first came across an opportunity to provide our Social Development model towards a potential landfill gas-to-energy project in Asmara, Eritrea.

This was the first time that we were exposed to a renewable energy project which needed to access carbon credits to ensure its financial viability. It was this need for the carbon credits that led an Italian landfill gas to energy developer to locate our social development models and combine them into a solution that would provide power in Eritrea combined with a compelling social development program that we designed to improve the lives of young people in Asmara.  Whilst this opportunity ended up not reaching financial close, it was pivotal in making us realize that the social work we were doing could be coupled with a renewable energy project to make the renewable energy project more profitable and bankable.

Within ten months of the Asmara opportunity, we realized that we had finally come across the means by which we could fulfil the real reason why we started Pele – to share the Justice Dividend and ensure structural change. Through renewable energy, we realized that the power plants we develop and operate will be the catalyst in transforming the environments and the lives of the people in the communities that our power plants operate in.  Thus, our focus shifted in late 2009 towards developing landfill gas to energy projects throughout South Africa, which fortuitously led us right back to the municipalities where we had built a social development track record as they were the only entities at that point which could generate their own power. 

In 2011, the South African government released the program through which they would procure renewable energy. This then allowed us to take on another step change and move towards the larger renewable energy sources of Solar PV and Wind.  In that same year, we were successful in the first bidding window under the Renewable Energy Independent Power Producers Program (REIPPP) with a 36 MW Solar CPV project located in Towusrivier. We started off with a 35% minority shareholding in this project and now sit as the majority sponsor operating the power plant. We have had the fortune of being successful in further bidding windows within the South African REIPPP over the years, building up one of the largest portfolios in South Africa. 

The relaxation of the generation cap limit allowed the private sector and large intensive energy users to start procuring power, this has allowed us to further entrench and grow our market leading position and provide our renewable energy offerings to some of the largest mines in Africa. 

 

The $132 million funding from investors including Nedbank, Norfund and IDC was announced in December. What does this funding mean for Pele? 

The facility has, for the first time, provided Pele Green Energy (PGE) with a consolidated funding platform designed to enable a competitive expansion in our operating portfolio from about 1 GW to 5 GW by 2027, as well as the capital needed to develop a pipeline of projects that will support the long-term growth strategy. It has also enabled PGE to refinance our existing group funding with a platform facility at the holding company level.

This innovative funding structure represents a material advance on our previous capital-raising processes, which typically involved us raising the capital required for our projects on a project-by-project basis.

This earlier model, was not only onerous and time-consuming but also uncompetitively priced, particularly as we have evolved into a lead sponsor of projects that we both own and operate.

We have deployed some of the funds to secure an equity position in a cluster of wind and solar projects being built by one of the largest and newly established energy traders. The projects have a combined capacity above 500 MW. 

Critically the facility will also enable us to conclude a portfolio of PGE-led projects in the coming months with a globally leading private off taker.

 

Congratulations on winning the Sustainability Award – your second time.  What does the award mean to you?

The win for us cements our aspiration of being known by industry peers as a progressive and transformational truly South African organization, one that lives and breathes the “Re Batho Pele- meaning People First, principle.

At Pele, our business is built on our People, intellectual property and unrivalled service delivery at both community and project level. To be acknowledged for our contribution to this industry’s success gives us great pride and fuels our drive to positively transform and impact the socio-economies of the communities in which we operate.

We are resolute in our mission to create a sustainable energy sector and ensure job creation and community development that ultimately grows the economy of our country and benefits the citizens of South Africa and the broader African continent at large.

For context, we were recognised for our contribution and commitment to sustainability and below initiatives were taken into consideration when they were adjudicating the entries.

ESD (Enterprise and Supplier Development): PGE is dedicated to uplifting local enterprises through targeted initiatives within the communities in which it operates. PGE has supported several micro-enterprises through its enterprise development programme, in which one is a solar installer in Mpumalanga province. Moreover, Pele contributes to economic development by providing office space and support to Bayaka a company specializing in advisory services and private market fund management, particularly focused on sustainable infrastructure investments.

Community: PGE’s bursary program is specifically tailored to benefit previously disadvantaged individuals, particularly those in underserved communities. Furthermore, PGE’s runs the largest internship program in South Africa which offers valuable training and workplace experience to graduates in renewable energy, empowering them for future success. 

PGE has partnered with the University of Johannesburg’s Development and Fundraising teams to launch its graduate programme for 2024 – one of the largest graduate programmes in the renewable energy sector in South Africa. The graduate programme offers students the unique platform to gain invaluable experience, receive mentorship from industry leaders, and make a meaningful impact in their chosen field. The programme accepts students across the following disciplines: Human Resources, Operation Management, Energy Operations, Finance, Asset Management, Business Development, Investment & Funding, Agriculture, Project Management, and Sustainability.

PGE's impactful initiatives are exemplified by the training of 100 students and 15 TVET College lecturers, all black female artisans aged between 20-28 in the Mpumalanga region. Subsequently, 15 learners are now permanently employed in reputable companies in Barberton, with two more employed in Witbank. Furthermore, Nkangala TVET College has initiated Renewable Energy Technology training with assistance from lecturers previously trained by PGE. Notably, PGE’s facilitator was recognized as a Renewable Energy Technology (RET) National expert at the National World Skills Day, demonstrating the effectiveness of PGE's training programs.

 

Which of your projects are you most excited about?

We are particularly proud of our 36MW Solar CPV1 project located in Touwsrivier in the Western Cape. This was the first utility scale project and we are the controlling lead sponsor and manage the operations of the facility.

The project remains our flagship and has given us the crucial hands-on experience we require as we target even greater independence and growth, including growth in our employment, which has increased from 20 employees seven years ago to above 100 today.

We are further proud of the work we have done to positively impact the lives of the people of Touwsrivier. Through Knowledge Pele, our sister company, our theory of change is that capable people provided with modern infrastructure are able to participate meaningfully in society. We focus on people, infrastructure and ultimately industrialise the community. In this community we have a very deep focus on skills development.

All the schools in Touwsrivier are solar powered, and Pele set up a community centre where young people can access the Internet and participate in various training programmes, including renewable energy skills training.

The strategy really came together with the establishment of a commercial scale hydroponic farm. We’ve tapped into the nature of the existing workforce, which historically has been geared towards the agricultural sector. In that way, we've created jobs and established a new industry. We are hoping to create value chain linkages that will continue to modernise the community.”

 

 Do you have any advice for young people thinking about a career in energy?

•  There are few sectors in the economy that play as pivotal a role in moving society forward and enabling progress and advancement. We provide an essential service: one no sovereign can do without. This means what we do is not glamorous, it’s not quick, it has long lead times, is very capital intensive and highly regulated.  Through all of this lies the most rewarding service one can provide: to bring light.
• The target for any young person should be to have a career in the service of one’s community and society – energy is as pivotal as it can get. 

 

What are you most looking forward to at aef24? 

Incredible connections and networking opportunities. There are few energy events globally that can compete with aef’s ability to bring state and private actors in one room, one city where they can engage meaningfully without the backdrop of our normal daily work lives. 

 

Pele Green Energy is a sponsor of aef24