The Competition Commission has recommended to the Competition Tribunal that it approve the proposed transaction whereby Cennergi Holdings and Cennergi Services intend to acquire AESA and O&M Company, without conditions.

The primary acquiring firms are Cennergi Holdings and Cennergi Services, which are controlled by Exxaro Resources. Exxaro and all the firms controlled by it are collectively referred to as the “acquiring group”.

The acquiring group is active in the supply of coal, iron-ore, zinc and renewable energy.

Of relevance to the proposed transaction are the acquiring group’s activities in the generation and supply of renewable energy under the country’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) to State-owned utility Eskom.

The acquiring group controls various renewable-energy projects in South Africa, including onshore wind and solar PV facilities, some of which are operational and others under construction.

These facilities generate and supply electricity either to Eskom under long-term power purchase agreements (PPAs) concluded in terms of the REIPPPP, or to private offtakers.

The primary target firms are AESA and O&M Company. The target firms are ultimately controlled by Acciona, a public company incorporated in Spain. The target firms and all firms controlled by them are collectively referred to as the “target group”.

The target group is active in the generation and supply of electricity from renewable-energy sources.

AESA is a holding company controlling two independent power producer projects, namely a solar PV facility located near Kathu, in the Northern Cape, and an onshore wind facility located near Gouda, in the Western Cape.

Electricity generated by these projects is sold exclusively to Eskom under long-term PPAs concluded in accordance with the REIPPPP.

O&M Company provides operation and maintenance services to the renewable energy project companies.

The commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market.

The proposed transaction does not raise significant public interest concerns, it adds.