Private equity firm Legacy Africa Capital Partners (LACP) has acquired a 30% equity stake in Continuous Power Africa (CPA), which provides off-grid and backup energy solutions to telecoms companies in Africa and South Asia.
CPA is headquartered in South Africa and Mauritius, and its customers include Vodacom, IHS Towers, American Tower Corporation Africa, Mantrac and Telkom.
The company provides solar and lithium battery solutions, as well as proprietary technology systems that allow telcos to manage their towers remotely and optimise their energy consumption.
The ongoing disruptive power cuts in SA have increased operational costs associated with keeping base stations alive and protected. To mitigate this, telcos are burning more fuel per month to maintain connectivity and provide decent customer experience. Some have also deployed generators to counter the impact.
Explaining the rationale of the LACP and CPA deal, the companies say as load-shedding takes its toll on mobile operators, an opportunity exists to provide them with cost-effective solutions for backup power, while reducing reliance on diesel.
The capital injection for the 30% stake by LACP will be used to further accelerate CPA’s growth and allow it to expand into other industries beyond telecoms, says the company.
“We believe this is an attractive sector, and CPA caught our attention as an innovative Pan-African business with a great management team and lots of room for growth,” says Kgosi Monametsi, managing director and head of private equity at LACP.
With the investment, LACP now joins existing investors in CPA, including South African entrepreneurs Duncan Hipkin and Simon Hipkin, and Pine Creek Renewables, a US-based asset developer and permanent capital vehicle that invests in low-carbon technology companies globally.
“We are delighted to partner with Pine Creek and the strong management team at CPA, and we believe CPA has the potential to become an industry leader,” says Monametsi.
Along with its equity stake in CPA, LACP has secured board representation as well, following the conclusion of the transaction.
Varun Giridhar, CEO of CPA, comments: “We are excited about unlocking the growth potential of the group, which is enabling the transition of the telecommunications sector into the new low-carbon economy.
“As load-shedding worsens in South Africa, there is a clear need for telcos to reduce their reliance on both the national grid and on diesel, which is growing increasingly costly. The same rationale applies to many other countries on the continent too.”
Share