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Journal of African Business Issue 4

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Welcome to Journal of African Business, your guide to business and investment on the continent. The fourth edition of Journal of African Business is the second issue of this magazine to be published as a quarterly. The first two journals were published as annual publications in 2020 and 2021. The Journal of African Business covers a wide range of subjects within the broader economic sectors: energy; mining and exploration; trade; finance; technology and tourism. In addition to this, special features on topical matters are included, along with country profiles.


BANKING ABOUT STANDARD BANK GROUP Standard Bank Group is the largest African bank by assets, operating in 20 African countries and five global financial centres. Headquartered in Johannesburg, South Africa, the group is listed on the Johannesburg Stock Exchange, with share code SBK, and the Namibian Stock Exchange, share code SNB. Standard Bank has a 159-year history in South Africa and started building a franchise outside Southern Africa in the early 1990s. The group’s strategic position, which enables it to connect Africa to other select emerging markets as well as pools of capital in developed markets, and a balanced portfolio of businesses, provide significant opportunities for growth. The group has over 46 000 employees excluding Liberty, more than 1 143 branches and over 6 600 ATMs on the African continent, which enable it to deliver a complete range of services across personal and business banking, corporate and investment banking and wealth management. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade and deal flow between Africa, China and select emerging markets. For further information, go to Renewable energy is attracting a lot of investment finance. Credit: Standard Bank size of signed deals we could do based on exposure and risk and structure and limits so that’s very much dependent on the deal. You don’t do infrastructure projects with government and that sort of thing? No, we don’t in my specific team, but Standard Bank through its wholesale franchise would have exposure to some of the largest infrastructure projects. The Equity Finance Team would fund the shareholder who in investing in infrastructure projects. Our funding is at shareholder level. The focus is on how we can fund the shareholder for them to be able to facilitate their value creation and grow their business. It allows you to get a foot in the door. The shareholder would still need to service this, it is still a commercial transaction and the returns still need to make sense economically. It allows us and whoever we partner with to take a view on the business. A lot of the risk we are taking is equity risk. As the dividends come in, we can then service the debt. Once you have serviced the debt to us, all the returns then come to you. Above: African entrepreneurship and resilience are inspiring. Credit: Jean Papillon on Unsplash We need to find the ability to be there for each other A In which sectors are you currently finding the most activity? There are a lot of industrialists who are very entrepreneurial who we are looking to fund. Currently the biggest sector with a lot of activity is renewable energy. We are seeing a lot of secondary deals (somebody is trading and selling off to another person) and we are seeing many new deals as well. There’s a lot of activity in construction and building of renewable energy infrastructure. We come in and fund the shareholder. Left: Women 4 Girls involves mentoring and caring. Credit: Women 4 Girls 10

POWER POWERING MINING IN AFRICA – THE RISE OF THE MINI-GRID AND THE CAPTIVE MODEL Simon Cudennec and Laura Kiwelu weigh up the many factors which miners must consider when they decide how to power their operations. Access to reliable, cost-effective (and, increasingly, green) energy in Sub-Saharan Africa is a major challenge for the mining industry. The mining industry is one of the most important energy consumers in the region and its energy demand is set to increase significantly in upcoming years, coupled with the increased importance of the industry in providing the raw materials necessary to power the energy transition. While the African mining industry is a key part of the global energy transition, it sits within a region where the energy sector is often subject to the monopoly control of state-owned utilities and reliant on suboptimal generation, transmission and distribution infrastructure. Mining companies have historically had no choice but to be connected to a grid and be the victim of frequent power outages or, for those in more remote locations, to use on-site diesel or heavy fuel oil (HFO) gensets for self-consumption (often at a premium price) or an inefficient combination of the two. Now, however, mining companies are increasingly committing to considering more innovative and green sources of energy to power their operations. WHAT IS A MINI-GRID PROJECT IN THE CONTEXT OF A MINE? A mini-grid project can broadly be defined as an energy distribution network isolated from the national grid involving one or more small-scale power generation source. In relation to a single mine or group of mining concessions, a mini-grid project could power the mines but also the local communities of mine workers and related infrastructure. Below: Exxaro Resources Limited, through its wholly-owned renewable energy subsidiary, Cennergi, is developing the 70MW Lephalale Solar Project to supply renewable energy to the Grootegeluk coal mine in Limpopo Province, South Africa. The company’s microgrid at Tshikondeni mine is shown here. Photo: Cennergi 11

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