Commodity prices move on cycles. Grid availability moves on decades. Only one of those two determines whether an African industrial project reaches steady state.
The instinct in commodity investment is to underwrite price. In African industrial projects, price is the more forgiving variable. A project structured with contracted offtake can absorb a soft cycle. It cannot absorb a grid that delivers eleven hours a day.
Embedded generation has shifted from a defensive measure to a core part of the capital structure. Solar with storage, contracted to an industrial offtaker at a fixed tariff, is now frequently cheaper than the utility alternative and considerably more certain.
Our energy platform exists for this reason. It is not a diversification play. It is the enabling condition for everything else in the portfolio.
This article reflects AGC's views at the date of publication and does not constitute investment advice, an offer or a solicitation.