Chariot Ltd (AIM:CHAR, OTC:OIGLF) has upped its stake in South African electricity trading company Etana Energy, which is one of a few in the country to hold a trading licence.
Up to US$1 million will be paid from cash reserves by March for the larger ownership share, Chariot said in a statement, with its stake in the electricity trading company increasing from 25% to 49%.
Further payments of up to US$4.2 million could be made based on several of Etana’s projects reaching completion over the coming years, Chariot added.
Partner H1 Holdings Ltd increased its ownership in Etana alongside Chariot and now owns 51%, with the pair purchasing stock previously held by Neura Group.
"We are very pleased to be increasing our exposure to the South African energy market,” Chariot Transitional Power boss Benoit Garrivier said.
Insufficient supply leading to blackouts has led to rapid market deregulation in South Africa, Chariot explained, “facilitating the build of renewable energy projects”.
Within this, Etana plans to offer renewable energy mix solutions to high-volume electricity consumers.
“We will not only get an increased split of future revenues, but the electricity trading business unlocks significant renewable generation capacity which we are looking to develop,” Garrivier added.
“We are tapping into the future growth of an essential market, one that is rapidly transforming and expanding.”