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Michael Jordaan in solar power venture

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 15 Apr 2015
Former FNB boss Michael Jordaan now has a finger in SA's energy and telecoms pies.
Former FNB boss Michael Jordaan now has a finger in SA's energy and telecoms pies.

Former First National Bank (FNB) boss Michael Jordaan, who recently opted to leave the banking world to pursue his passion of enabling disruptive business models backed by technology, is now backing a solar power venture.

Jordaan - together with another banking icon, First Rand Group founder Paul Harris - have put their faith and money into an initiative that is helping South Africa's commercial sector escape its reliance on Eskom, with homeowners next on the chart.

The renewable energy company behind the venture is BrightBlack - which specialises in the design, implementation and operation of solar projects - and the man behind the company is seasoned IT professional Wessel Wessels.

Jordaan says the team is in discussion with around 50 malls and office parks around implementing the renewable energy solution on premises, while BrightBlack will offer homeowners a solar solution that will be at zero cost within five years, starting with a residential project of about 20 homes around June.

Bright idea

Wessels says the business model entails financing the installation of a solar power system, with a minimum investment from the landowner needed. "Basically we see it as equity. If they put in 20% equity, they will get the normal share's return, plus 20%.

He says BrightBlack started implementing its commercial solution about a year ago, when it was acquired by Multisource.

"The biggest obstacle in the commercial space is funding, hence our choice of this business model. We sign a 12-year agreement with the client, and we then install and maintain the installation for that period."

In terms of how much the solution costs, Jordaan says this depends on the size of the mall or office park - "but because we finance it, there is only a small investment needed by the landowner".

"The landlord's investment directly translates into the percentage saving we can give him in solar-generated power relative to the cost of Eskom."

Homeowner offering

Starting around June, BrightBlack will move out of the testing phase with residences, which Wessels indicates currently involves testing the technology and operation models at about 20 houses, and launch the solution to the public.

While the company will install at some residences on an ad hoc basis, the main target will be gated communities. "We are talking to a number of banks and are busy with a financial model whereby you add the solar installation to your bond," says Wessels, pointing out the solution will be sold and branded by the bank.

Jordaan says BrightBlack is going to be teaming up with "various financial institutions" to implement the solution for homeowners.

In terms of costs, Jordaan says BrightBlack has three solutions on the table - backup power "load shedder", bill reduction and semi-independent. "The price all depends on the size of the house and type of solution. Because we are approaching this strategically and not just on a 'deal-by-deal' basis, we can negotiate better pricing for the end-user."

The typical price for a 5kVa solution that uses both storage and intelligent energy, gives the homeowner six hours standby power and brings the electricity consumption down from between 40% to 70%, costs about R125 000 for tier one products, says Jordaan.

Wessels says, while there are many players looking to get into the energy game in the wake of SA's power crisis, BrightBlack's advantage lies in the reputation and long-term view its banking background shareholders bring to the table.

Multisource and BrightBlack

While BrightBlack and operating company Electrosense was acquired by Multisource - in which Jordaan's investment vehicle Montegray Capital holds about 16% - early last year, it has since been unbundled and now operates independently under the BrightBlack brand.

This move followed Multisource's in-process acquisition of WBS Holdings, under which both Broadlink and iBurst fall - a move that was made largely for the sake of spectrum (800MHz and 2.6GHz), which Multisource could use to deploy next-generation fixed or nomadic wireless services.

Jordaan says the acquisition means Multisource would need to focus on the telecoms space, rather than working in both telecoms and energy.

The acquisition awaits final approval from the relevant authorities, the Independent Communications Authority of SA (ICASA) and the Competition Commission. While it is believed ICASA has approved the deal, the authority has yet to confirm this. The parties involved do not expect resistance from the commission's side.

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