Merchant solar meets emerging power markets

Solarcentury Africa and Sino Energy (Pty) Ltd have agreed to co-develop the Gerus solar PV project in Namibia’s Kunene Region. The partners describe the scheme as one of the first fully merchant solar plants in the region. Power will be sold directly to large customers in Namibia and into the Southern African Power Pool (SAPP).

The deal positions both companies to benefit from growing demand for flexible clean power among industrial and commercial users. It relies on merchant sales rather than a long-term single-buyer tariff — a structure that carries more revenue risk but also more pricing upside.

The first phase is planned as a 19.3 MWp solar PV plant near Outjo in Kunene. According to the project sponsors, all licences and environmental permits are in place, with initial completion targeted for the fourth quarter of 2023. However, the project structure remains significant for investors regardless of timeline.

Solarcentury Africa plans to back the project with a dedicated trading company. This entity will manage renewable power sales from Gerus and other assets across Namibia and the Southern African Development Community. The trading arm is designed to route output to large domestic offtakers and into SAPP’s competitive markets, which allow cross-border electricity trading among member utilities and independent power producers.

The Gerus project’s second phase is planned to add a further 100 MWp of solar PV capacity. This expansion would connect at transmission level into the Gerus substation, owned and operated by NamPower, Namibia’s state-owned utility. As a result, the plant could scale from a modest merchant starter project into a sizeable regional supply node.

Why this Namibia solar deal matters for investors

Solarcentury Africa is part of BB Energy Group, an energy trader with a global footprint and more than five decades of trading experience. The company positions Gerus as the opening move in a broader Southern African pipeline that combines generation development with active power trading. Head of Solarcentury Africa, Jason De Carteret, frames the strategy as a way to marry project development skills with BB Energy’s trading capabilities and local partnerships.

Sino Energy brings a purely Namibian perspective. The company’s principals have worked in the country’s energy sector for over a decade. They previously developed and commissioned a 6.5 MW solar PV plant that has operated since 2018. Sino Energy presents itself as a 100 percent Namibian-owned infrastructure company focused on renewable energy, with in-house capabilities spanning planning, design, construction, and operations.

Together, the partners aim to meet part of the Southern African region’s power shortfall through merchant renewables rather than traditional long-term utility power purchase agreements. They explicitly link Gerus to the region’s serious power deficit. One director at Sino Energy describes energy trading as the future of the sector and casts Gerus as an overdue step.

What does the deal mean for regional power investors?

For investors, the deal offers a live case study of merchant risk in a regional power market that is still maturing. Revenue will depend on the ability to secure large corporate buyers in Namibia and to access liquid SAPP markets. However, the project sponsors signal confidence that growing industrial demand and more open access arrangements will support bankable merchant structures in time.

The Gerus solar PV plant also shows how regional power pools and private trading houses are shaping capital allocation. Merchant solar backed by a trading company can shift electrons quickly to where demand and prices are strongest. This dynamic is already drawing attention from investors tracking the Eastern Africa Power Pool’s $40bn trading ambitions and similar cross-border energy plays across the continent.

One analyst summary is already clear: merchant renewables in Southern Africa are moving from theory to trading floor reality. The Gerus model echoes a broader continental shift — comparable momentum is visible in Angola’s solar transition, where independent developers are also challenging conventional utility procurement structures.

If Gerus’ first phase delivers sustained merchant cash flows and the 100 MWp second phase proceeds at the Gerus substation, it will strengthen the case for similar deals in Namibia and across SAPP-connected markets. Investors should watch how offtake contracts are structured, how much volume clears through SAPP, and whether regulators continue to support open access as more merchant capacity enters the grid.

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