Specialist international financial advisory company Fieldstone Africa, which specialises in the energy and infrastructure sectors, is working closely with several independent power producers (IPPs) on electricity generation projects.
Fieldstone Africa MD Clive Ferreira says that the independent investment banking boutique is able to execute domestic, international and cross-border transactions, based on its expertise and access to international capital markets.
He adds that the company has already engaged in business with most investors in the IPP sector, and that it continues to honour its obligations to the National Energy Regulator of South Africa (Nersa).
Creamer Media’s Research Channel Africa reports that in 2006, Nersa appointed Fieldstone Africa to establish the qualifying principles and finance support framework for cogener-ation projects in South Africa.
Ferreira notes that Fieldstone Africa is now putting a dispensational framework in place, which will encourage the cogeneration of electricity within industries.
Further, the company, on behalf of a client, is involved in State-owned power utility Eskom’s tender for the development of its baseload IPP programme, in which Eskom plans to secure between 2 100 MW and 4 500 MW of power from private developers.
Ferreira points out that Fieldstone Africa is working with a major coal supplier on this tender, while the company is also involved in the financing and development of four hydro- electricity plants in Zambia.
The company’s biggest trans-action to date has been the successful $950-million repurchase of the Cahora Bassa hydroelectric plant, in Mozambique, where the company advised the government of Mozambique in the deal that was finalised in 2007.
Meanwhile, Ferreira comments that all IPPs are limited to the equity that they put into a specific project, and that this approach provides no recourse to the client’s balance sheet.
He reiterates that when a company finances a project, about 70% to 80% of the capital needs to be raised at competitive rates, while a firm focus should be kept on improving the client’s rates.
“There is also a critical distinction between financial equity and investment, since IPPs take longer and can be more expensive, but deal with risks more efficiently,” he says.
In addition to being the single biggest financial services com- pany specialising in the energy sector, Fieldstone has also become a sector specialist in upstream and downstream projects, since the company has closed transactions in the gas and mining industries.
The company’s energy sector specialisation has also made it a pioneer in providing strategic equity to some of the first IPPs in the developing world, in countries such as Bolivia, the Philippines, Malaysia, Tanzania, Ghana and Nigeria.
Ferreira adds that Fieldstone prefers to get involved early in any project, thereby ensuring that it is well structured to attract equity and debt.
Fieldstone Africa is a sub- sidiary of the Fieldstone group, which was founded in the US in 1990. Fieldstone’s South African branch was founded by Ferreira in 1995, and serves the entire African continent from its Sandton office.