LONDON (Alliance News) - IPSA Group PLC saw its shares rise strongly Friday after it said it had commissioned additional capacity at its Newcastle plant, leaving it well placed to bid in the upcoming independent power producer programme in South Africa and return to growth.
In a statement, the South African power generator said a Deutz engine is now operating at the Newcastle cogeneration site in Kwa-Zulu Natal. It also said that the installation programme for the two Jenbacher engines it acquired late last year is progressing and is fully funded, and it expects the engines to be online by mid-August.
"In addition two small LV generators are being added which together with the other gas engines will allow the site to maximise output under the current power purchase agreement in place with ESKOM and increase it by an average of 50% above last years' levels. With the addition of gas engines the overall efficiency of the installed capacity improves by 20% from last year's average," IPSA said in a statement.
It said the new capacity will position it to bid in the next independent power producer programme in South Africa. Under the programme, the South African government contracts independent power producers to supply energy, reducing the reliance on the state-owned power utility Eskom.
The new capacity will allow IPSA "to bid into these opportunities immediately with existing capacity and with the full knowledge that we can expand the capacity of the Newcastle site to at least 30 MW in the future using the existing infrastructure and gas supply contracts already in place," the company said.
"After a long period of no growth in this business, we have finally turned the corner with the installation of these efficient gas engines and this provides us with a sound platform for growth in an environment which is now open for business as far as IPPs are concerned," IPSA Chief Executive Phil Metcalf said in a statement.
IPSA shares were up 18.5% at 4 pence Friday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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