Anglo American's decarbonisation journey spurred by Envusa Energy deal

Envusa Energy — a joint venture between mining giant Anglo American and independent power producer EDF Renewables — is set to transform Southern Africa's energy landscape.

Financing has been finalised for three Envusa Energy projects that will provide 520MW of renewable energy for Anglo American’s mining businesses in SA.

Nedbank Corporate & Investment Banking (CIB) played a key role in structuring, negotiating and executing the multibillion-rand financing deal for the initial phase of Envusa Energy's ecosystem. 

Envusa Energy has commenced construction of the Koruson 2 cluster, comprising two wind farms and one solar PV farm located on the border of the Northern Cape and Eastern Cape. Developed in partnership with Pele Green Energy and a local community trust, commercial operations are expected to commence around 2026.

The renewable energy generated will be wheeled through the Eskom grid to Anglo American Platinum, Kumba Iron Ore and De Beers’ mining and processing operations throughout SA. This will reduce Anglo American’s carbon emissions by an estimated 1.5-million tonnes annually, enabling it to offset rising energy costs and invest in long-term sustainability.

The projects are only the first phase of the ecosystem and Envusa Energy’s goal is to reach 3GW-5GW of renewable energy generation. Anglo American is committed to being carbon neutral by 2040.

Nedbank CIB is proud to have partnered with two of its important clients — Anglo American and EDF Renewables — in helping to create the Envusa Energy platform and embracing the vision to align Anglo American’s decarbonisation commitments with SA’s accelerating energy transition.

Nedbank CIB shares Anglo American’s conviction that increased energy availability will help catalyse socioeconomic activity and improve economic development and growth prospects in SA.

Besides co-ordinating various workstreams leading to the transaction’s financial close, Nedbank CIB was also the lead arranger, lender, hedge provider, technical bank, insurance bank, facility agent and account bank, which underscores the bank’s commitment to sustainable and inclusive growth. 

Nolitha Fakude, chair of Envusa Energy and Anglo American’s management board in SA, said the attainment of financial close for these three premium renewable energy projects is a pivotal moment in the mining company's global decarbonisation efforts, and strengthens the country's resolve for a robust, resilient and clean energy future.

Tristan de Drouas, CEO at EDF Renewables in SA, said: “Collaborating with Anglo American to apply our extensive global expertise in renewable energy infrastructure development, design and delivery has been immensely rewarding. With Envusa Energy being developed as a jointly owned venture with Anglo American, we have reinforced our long-term commitment to SA’s transition to clean energy.”

Envusa Energy is expected to have a positive impact in communities across Southern Africa as its renewable energy ecosystem grows. It is exploring BEE and community partnership models that will enable businesses to grow and host communities to share in the benefits of the wind and solar developments in its project pipeline.

The first empowerment initiative includes: 

• Incorporating a 20% equity investment by Pele Green Energy, an established SA independent power producer, into the three project companies that are developing the Koruson 2 assets; and 
• Establishing a trust to manage the financial interests of local communities.

The Envusa transaction is the latest evidence that SA’s accelerating energy transition, with an estimated 22GW of new private solar and wind power due to come online within the next three years, is rapidly and fundamentally changing the electricity generation landscape.

Nedbank CIB is playing a leading role in the transition, supporting projects in the government’s Renewable Independent Power Producer Programme and private developments. It is leveraging its long-standing reputation as SA’s sustainability bank to demonstrate its commitment to the just-energy transition, economic growth and the alleviation of pressure on Eskom’s generation and infrastructure capabilities. 

According to a recent briefing by business and the government, independent modelling has identified a “critical path” that can end load-shedding by the end of 2025 — as long as the required enablers remain in place.

One of these enablers is the willingness of investors and financial institutions to fund renewable energy projects and find the connections that unlock synergies in the developing wind and solar ecosystem. The ability to identify and capitalise on these unexpected connections unleashes multiplier effects that creates sustainable growth.

Once platinum group metals emerge from Anglo American Platinum’s Limpopo mines and are milled, smelted, purified and refined, for example, they can be used as a catalyst in clean energy technologies, such as fuel cells and hydrogen electrolysers, and can play a key role in producing green hydrogen from renewable energy sources. This is a virtuous circle with the potential to reduce and eventually eliminate the use of fossil fuels at every point of the compass.

Nedbank CIB’s strategic vision, which integrates environmental, social and governance objectives into its core business operations, makes it the ideal partner for corporates seeking to do the same. The bank’s track record in delivering innovative solutions that drive the bottom line while boosting sustainability, reflects a nuanced understanding of its clients and the communities where they operate. 

“Envusa Energy represents a landmark deal that exemplifies Nedbank CIB’s dedication to driving sustainable and inclusive growth across the continent,” said Amith Singh, head of energy finance at Nedbank CIB.

“By supporting clients in transitioning to a low-carbon economy, Nedbank CIB plays a pivotal role in Southern Africa’s ongoing journey towards cleaner energy solutions.”

This article was sponsored by Nedbank CIB.