Report
Stephane Foucaud

Chariot Limited (AIM: CHAR): Significant power transaction highlights the value of the S. Africa electricity trading business

• Etana Energy, the South African electricity trading business (49% held by Chariot) has arranged a US$55 mm guarantee finance facility through Standard Bank and secured an equity investment of up to US$20 mm from Norfund for working capital.
• In exchange, Standard Bank and Norfund will hold 10% and 20% of the project’s economics, respectively, via preferred equity. This leaves Etana with 70%, equating to ~34.7% net to Chariot. The US$20 mm preferred equity investment predominantly from Norfund values Etana at ~US$100 mm, translating to ~US$34 mm net to Chariot or £0.022/sh.
• Etana has also signed a 20-year PPA for the entire supply from the 75 MW Du Plessis Dam PV2 solar project in South Africa. The agreement’s counterparty, Mulilo, will construct the plant and oversee electricity generation. The project has achieved financial closure, all necessary permits are secured, and construction is set to commence in 2Q25.
• Mulilo is a prominent renewable energy developer and independent power producer in South Africa. The company’s development pipeline exceeds 40 GW, and it operates 420 MW of wind and solar capacity.
This transaction underscores the growing value of Chariot’s power operations in South Africa and solidifies Etana’s credibility as a reliable counterparty for future projects. As we add the value of Etana to our valuation, we are increasing our target price to £0.10/sh.

More to come
The Du Plessis Dam PV2 project is the first solar generation project within Etana’s broader renewable power offtake portfolio to achieve financial close. With today’s announcement of bank security and equity funding, coupled with the existing US$100 mm security from British International Investment and GuarantCo, new renewable energy projects are now positioned for progress. This financial backing provides developers with the revenue certainty required to reach financial close and initiate construction. Etana is poised to announce new PPAs from other new generation assets, potentially far exceeding the 75 MW capacity of Du Plessis, and in which Chariot has stated its intent to secure direct equity participation. Beyond this, Chariot holds interests in several key power projects, including: (1) Tharisa (40 MW solar in S. Africa), (2) Quantum copper mines (430 MW) in Zambia and (3) Karo Platinum mine (30 MW) in Zimbabwe.

Valuation
The value of Chariot’s interest in Etana represents 150% of the current share price. We are attributing £0.05/sh to the company’s discovered resources in Morocco and £0.03/sh to the remaining power and green H2 business in Africa. We are not carrying any value for Namibia.
Underlying
Chariot Oil & Gas

Chariot Oil & Gas is an independent oil and gas exploration company focused offshore in West Africa with a portfolio of assets located in the under-explored regions of Namibia, Mauritania and Morocco.

Provider
Auctus Advisors
Auctus Advisors

Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.

The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.

Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.

Auctus provides Corporate Broking, Equity Research and Investment Banking services. 

Analysts
Stephane Foucaud

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