Chariot Ltd (AIM:CHAR, OTC:OIGLF), the energy company, is primed to cash in on the decarbonisation of South Africa’s power sector, analysts at Cavendish believe.
On Monday morning, the group announced it had completed a joint takeover of electricity trading company Etana Energy.
Etana is one of only a few companies to have a trading licence in South Africa, therefore allowing it to offer renewable energy to both commercial and industrial customers.
South Africa has suffered blackouts for the last 15 years as its national utility company struggles to cope with ageing infrastructure.
New government rules mean licensed companies can now generate as much as 100MW capacity, having previously been limited to 1MW.
It also allows South Africa to move away from coal-fired power and towards renewables, especially solar and wind power.
Cavendish believes the country could be a huge region for green investment due to its high levels of sunshine and numerous coastal areas.
Therefore, the house broker targets a 423% upside for the AIM-listed firm and foresees the shares lifting from 11p to 57.7p.