Kalahari Grid Energy — Business Model & Revenue Streams
The revenue streams across utility and corporate PPAs, the tariff structure, the unit economics and the platform economics underpinning Kalahari Grid.
Section 4 · Business Plan
Business Model & Revenue Streams
The revenue streams across utility and corporate PPAs, the tariff structure, the unit economics and the platform economics underpinning Kalahari Grid.
4.1 Revenue streams
| Revenue stream | Share | Description & contracting basis |
|---|---|---|
| Utility PPAs (Eskom/NTCSA/municipal) | 46% | REIPPPP 20-year government-backed PPAs; inflation-indexed; the bankable base load of the portfolio. |
| Corporate PPAs (mining & industrial) | 34% | Direct 10–20 year PPAs with creditworthy C&I offtakers; premium USD-linked tariffs; the return driver. |
| Energy wheeling & trading | 12% | Wheeling generation to off-site offtakers via the grid; trading through aggregators; margin on volume. |
| BESS arbitrage & ancillary services | 8% | Battery arbitrage (charge low / discharge peak) and grid ancillary/capacity services under BESIPPPP and merchant models. |
4.2 Value-chain positioning
The Company captures value at each stage: early-stage development
(land options, grid applications, environmental authorisation) creates
the scarcest asset — a grid-connected, permitted, shovel-ready project;
financial structuring assembles non-recourse project debt and equity in
ring-fenced SPVs; EPC contracting delivers construction under
fixed-price turnkey terms that transfer completion risk; asset ownership
retains the long-dated contracted cash flows; and O&M lifecycle
management preserves availability and yield. Development and ownership
are where the margin and the moat sit; EPC and O&M can be partially
outsourced to specialist contractors under performance guarantees.
4.3 Portfolio technology mix and unit economics
Solar PV (2.8 GW) offers the lowest capital cost per MW (~$0.75m) and
fastest deployment, but a lower capacity factor (~28%) and
mid-day-concentrated output that strains the grid. Wind (1.7 GW) costs
more per MW (~$1.30m) but delivers a higher capacity factor (~38%) and
an evening-weighted profile that better matches demand — though it has
been unable to win REIPPPP capacity on price and grid grounds, making
corporate offtake and grid-corridor access essential to the wind
allocation. BESS (0.5 GW / ~2 GWh) adds no net energy but firms output,
captures arbitrage and unlocks the storage-mandated bid windows — the
integration layer that makes the hybrid portfolio dispatchable and
premium-priced.
4.4 Offtake counterparty and credit framework
Revenue quality is a function of offtaker creditworthiness and
contract structure. The portfolio deliberately blends government-backed
utility offtake with creditworthy corporate counterparties, spreading
concentration risk and lifting the blended tariff. Lenders will size
debt against the weakest material counterparty and the contracted (not
merchant) share of revenue.
| Offtaker type | Credit basis | Tenor | Tariff character |
|---|---|---|---|
| Eskom / NTCSA (REIPPPP) | Government-backed via IA & GFSA | 20 years | Lower ($0.033–0.045); bankable base |
| Mining majors | Investment-grade corporates | 10–20 years | Premium ($0.06–0.08, USD-linked) |
| Data centres / industrials | Strong corporate credit | 10–15 years | Premium; reliability-driven |
| Municipalities | Variable; ring-fenced structures | 10–20 years | Mid; wheeling-enabled |
| Merchant / trading | Market price; no contract | Short | Volatile; minimised in plan |
The bankable-path analysis in Section 7.6 depends entirely on
shifting weight from government-backed REIPPPP solar (low tariff,
highest credit) toward corporate PPAs and wheeling (premium tariff,
strong-but-not-sovereign credit). This is a deliberate trade of a few
notches of counterparty credit for roughly 27% more revenue per kWh —
the single most important commercial decision in the plan, and the one
lenders and equity will scrutinise most closely. The Company mitigates
the credit trade through counterparty diversification, take-or-pay and
floor structures, and credit support where available.
curtailment
Portfolio output of 11.2 TWh on 5 GW implies a blended ~25.6%
capacity factor after accounting for BESS (which shifts rather than adds
energy). That is achievable on paper, but grid curtailment is the live
threat: mid-day solar saturation in the Northern Cape corridor has cut
plant output by as much as 20% in stressed periods. Every point of
sustained curtailment reduces revenue proportionally and is not fully
within the Company’s control. The plan’s grid-corridor diversification,
storage integration and wheeling strategy are the mitigations, and the
downside scenario (Appendix D) sizes a 30% curtailment/underperformance
case.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Kalahari Grid Energy (Pty) Ltd.