Kalahari Grid Energy — Executive Summary

The investment thesis, the headline economics and the honest assessment of tariff, bankability and returns for Kalahari Grid's 5 GW utility-scale renewable-energy portfolio.

Section 1 · Business Plan

Executive Summary

The investment thesis, the headline economics and the honest assessment of tariff, bankability and returns for Kalahari Grid’s 5 GW utility-scale renewable-energy portfolio.

Kalahari Grid Energy (Pty) Ltd is a utility-scale renewable energy
developer and independent power producer targeting a 5 GW portfolio of
solar PV, onshore wind and battery energy storage across South Africa,
with later-phase expansion into Zambia, Namibia and Botswana. The
Company develops, finances, constructs and operates large-scale projects
under long-term power purchase agreements (PPAs) with utilities and
industrial offtakers, combining REIPPPP awards, corporate PPAs, energy
wheeling and battery arbitrage. Its strategy replicates the scale-first,
grid-corridor-led approach that has allowed leading South African IPPs
to build multi-gigawatt pipelines.

The portfolio comprises 2.8 GW of solar PV (56%), 1.7 GW of wind
(34%) and 0.5 GW of battery storage (10%), built out in three phases
between 2026 and 2032 at a total capital cost of approximately $5.3
billion. At full operation the portfolio generates roughly 11.2 TWh per
year, producing steady-state revenue of about $616 million and EBITDA
near $444 million at a 72% margin — the high-margin,
contracted-cash-flow profile characteristic of operating renewable
assets.

1.1 Investment highlights

A market defined by structural scarcity of
power. South Africa’s chronic generation deficit, Eskom’s
coal-fleet decline and corporate decarbonisation have created durable,
price-inelastic demand for new capacity; large users increasingly treat
renewables plus storage as core infrastructure, and Bid Window 7 solar
was 4.7x oversubscribed.
Scale-first, grid-corridor strategy.
Gigawatt-level clustering, early grid-capacity control and hybrid
solar-wind-storage integration differentiate the Company from fragmented
project-by-project developers — the single most important structural
advantage in a grid-constrained market.
Diversified, contracted revenue. A blend of
utility PPAs (Eskom/NTCSA), corporate PPAs with mining and industrial
offtakers, wheeling and trading, and BESS arbitrage and ancillary
services, under 15–25 year contracts, underpins long-dated, largely
USD-linked cash flows.
Climate- and DFI-aligned. Roughly 8 million
tonnes of CO₂ avoided per year at full build and around 7,000 job-years
supported, aligning squarely with IFC, DBSA, AfDB and climate-finance
mandates.
Exit optionality. A contracted, operating 5 GW
platform is a natural target for infrastructure-fund acquisition or a
public listing, with a deep buyer pool for de-risked renewable cash
flows.

Independent analyst view — read before the
financials

This Memorandum preserves the sponsor’s headline portfolio, capex and
steady-state revenue and EBITDA exactly, but independently re-derives
the financing structure and returns — and reaches a candid,
decision-critical conclusion. Three findings dominate: (1) grid
capacity, not capital or demand, is the binding constraint — wind was
awarded zero MW in the last two REIPPPP windows and 60–70% of
prospective projects face curtailment or connection queues, so the
build-out timeline is exposed to grid availability far more than to
financing; (2) the tariff does not support the gearing — a blended
$0.055/kWh generates a portfolio DSCR that never reaches the bankable
1.30x even at a reduced 62% gearing (it peaks at 1.29x in year 12), and
equity IRR at that tariff is only about 7%; and (3) the structure
becomes bankable at a higher blended tariff — at roughly $0.070/kWh,
achievable through a heavier weighting to corporate PPAs and wheeling to
mining offtakers rather than pure REIPPPP solar, DSCR clears 1.35x and
equity IRR rises to roughly 15%. The investment case therefore rests on
securing grid capacity and a premium offtake mix — not on the headline 5
GW number.

Figure 1

Figure 1 — Portfolio revenue and EBITDA ramp as capacity reaches commercial operation ($m)

1.2 Summary portfolio metrics

Metric	2027	2029	2031	2033	2037
Operational capacity (GW)	0.6	2.4	4.2	5.0	5.0
Revenue ($m)	37	240	462	616	616
EBITDA ($m)	23	166	328	444	444
EBITDA margin (%)	62.0	69.0	71.0	72.0	72.0
DSCR (x) — base case	0.70	0.93	1.02	1.11	1.29

Use of proceeds. Solar PV $2.1bn (2.8 GW); wind
$2.2bn (1.7 GW); BESS $1.0bn (0.5 GW / ~2 GWh) — $5.3 billion in total,
deployed 2026–2031 and financed at the SPV level through project
finance. This Memorandum models a lender-realistic 62% blended gearing
with a debt-service reserve, in place of the sponsor’s 75%, for the
reasons set out in Section 7.

1.3 Transaction at a glance

Parameter	Detail
Opportunity	5 GW utility-scale renewable IPP portfolio (solar, wind, storage)
Capital programme	~$5.3bn deployed 2026–2031
Equity requirement (bankable structure)	~$2.0bn (62% gearing), not ~$1.33bn (75:25)
Senior debt	~$3.3bn project finance in ring-fenced SPVs; 18-yr; ~7.5% USD
Steady-state revenue / EBITDA	$616m / $444m (72%) at $0.055/kWh base
Base-case returns	Project IRR 6.7% · equity IRR 7.1% (11x exit)
Bankable-path returns	Equity IRR ~15.3% at $0.070/kWh blended tariff
Binding constraints	Grid connection capacity; blended-tariff realisation
Target funders	IFC, DBSA, AfDB, infrastructure & climate-finance investors
Exit	Infrastructure-fund sale / strategic / IPO (2033–2034)

The transaction is best understood as a scale platform play in a
scarcity-priced market, whose returns are governed by two variables the
plan makes central and discloses in full: securing grid capacity, and
lifting the blended tariff toward $0.070/kWh through a
corporate-PPA-weighted offtake mix. The sections that follow build the
case around those two questions.

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.