Tata Power and Exxaro Resources (Exxaro) have launched a clean energy company called Cennergi as a 50:50 joint venture in South Africa, Namibia and Botswana. Anil Sardana, managing director, Tata Power, shares with tata.com the strategic plan for Cennergi, which includes joint development of high-quality renewable energy projects that will bring significant benefits to the region.
What are the electricity generating opportunities available for a new entrant in Africa's rapidly expanding energy market?
What are the advantages of partnering with local entities while pursuing growth opportunities in potential markets?
We started a structured process in August 2010 (when we set up a formal presence in South Africa) to find a local partner. In the case of Cennergi, we have partnered with Exxaro, which is one of the largest diversified resources companies operating in South Africa. They bring with them a wealth of experience in the energy market in that country. They are the largest supplier of thermal coal to the local utility and have access to substantial thermal coal resources, gas blocks and coal bed methane tenements across southern Africa.
Exxaro is hence an ideal partner for Tata Power to be a relevant and substantial player in the African electricity market. The partnership will ensure that Cennergi possesses the skill set, track record and experience to become a successful South African power company.
Will Cennergi carry out the joint stakeholder Exxaro’s proposed projects, or will it conceive new ones?
The company will be working to develop new projects along with those that were being developed by Exxaro prior to the formation of the JV company.
What are the potential challenges facing Cennergi?
Will the new entity, now concentrating on renewable energy like wind, and solar energy, graduate to other energy sources such as thermal power in the future?
What other sustainable projects are on the anvil? Can you elaborate on the benefits that this joint venture will bring to the region and local communities?
Cennergi will be a committed and active member in community development programmes in the region as is the case with all our new projects. Large-scale energy and infrastructure projects inherently have a broader benefit to the communities in the immediate proximity and neighbouring towns as they typically result in an improvement of local infrastructure, economic stimulation and various community development projects. Cennergi has provided basic power, infrastructure and transport facilities for local communities in its existing project areas. Apart from that, it will also focus strongly on education and capacity building for sustainable development.