Anglo American PLC (LSE:AAL) and EDF Renewables have teamed up to create a renewable energy partnership in South Africa in the form of Envusa Energy.
The initial phase of the partnership will involve the launch of 600 megawatts (MW) of wind and solar projects, the companies said in a statement.
The partners have given this undertaking the fancy name of “regional renewable energy ecosystem”.
In March 2022, the two companies signed a memorandum of understanding to explore the “ecosystem's” development.
The idea is that the renewable energy involved will meet Anglo American's operational power requirements in South Africa and support the resilience of the local electricity supply systems.
The favoured buzzword du jour - decarbonisation - is also much on the partners’ minds.
South Africa’s electricity system is famously bad, with power cuts frequent as supply is unable to meet demand.
The “ecosystem” is also expected to “catalyse economic activity” in South Africa's renewable energy sector, supporting the country's broader “just” energy transition, according to the statement.
The plan is that Envusa will generate 3-5 gigawatts (GW) of renewable energy by 2030. The first phase of Envusa Energy's renewables projects is expected to be fully funded - including by attracting debt financing that is typical for high quality energy infrastructure projects - and ready for construction to begin in 2023.
Envusa Energy is expected to supply Anglo American with a blend of renewable energy generated on Anglo American's sites and renewable energy transmitted via the national grid.
"I'm delighted to confirm our ground-breaking partnership with EDF Renewables to form Envusa Energy,” said Nolitha Fakude, chair of Anglo American's management board in South Africa.
“This is a significant milestone in Anglo American's global decarbonisation journey and another step forwards for South Africa's clean energy future. We are making great strides towards our 2040 target of carbon neutral operations, while contributing to South Africa's just energy transition through our responsible approach.”