NCCL.L Share News (NCCL)

(Sharecast News) - Ncondezi Energy announced on Friday that it had entered into a term sheet with GridX Africa Development - an African power developer - which would enabling it to enter into a joint venture focussed on building and operating captive solar and battery storage solutions for the African commercial and industrial sector.The AIM-traded firm also said it had raised a total of £1.88m before expenses, through a conditional placing and direct subscriptions of 28,856,060 ordinary shares at a price of 6.50p each.It said it would use the proceeds of the fundraising to pay a fee in two stages to GridX of $0.39m, allowing it to enter into definitive agreements to formalise the joint venture.The fee included all costs to set up the joint venture, and would secure an exclusivity period and right of first refusal over GridX's pipeline of commercial and industrial projects.It was also intended that the funds would be used to fund the first project, currently estimated to be $1.1m, with the balance of the fundraising available for general working capital purposes."The company is pleased to announce the signing of a binding term sheet with GridX, and believes the move into the commercial and industrial solar and battery storage sector represents a significant opportunity for the company to complement its existing large scale baseload power project and access near-term low-risk annuity income streams, which the company believes has significant growth potential," said Ncondezi non-executive chairman Michael Haworth."Falling solar panel and battery costs are setting the foundation for a tide of disruptive technology in the African energy markets, allowing African countries to leapfrog to the next generation of sustainable energy supply, in a similar way to wireless cellular phones allowing African countries to bypass fixed line infrastructure and adopt mobile technology."At the same time, significant investment appetite is growing in the sector as investors increasingly recognise smaller renewable captive generation projects as a source of steady returns."Haworth noted that GridX had recently completed its first solar and battery storage project at Singita Faru Faru Lodge, located in Tanzania.He said the GridX project was the first of its kind in Tanzania, and the first commissioned using Tesla batteries.That provided a "strong" experience platform to deliver the rest of the GridX portfolio through the joint venture."The JV structure provides the opportunity for a phased and low risk entry point into the sector, with GridX responsible for the development and delivery of construction ready projects for investment consideration and a diversified portfolio approach spreading investment risk across multiple projects."The successful fundraising provides the company with sufficient capital to enter into the exclusive discussions with GridX on the joint venture and a right of first refusal to invest in its projects in the meantime with the first project fully funded, as well as general working capital until the end of the first quarter of 2020."This puts the company in a strong financial position to execute on its work programme."