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Greenline Africa signs framework agreement on acquisition of production line in South Africa


Greenline Africa has signed a framework agreement with Absolicon for the acquisition of a production line for the solar collector T160 in South Africa. The total sales value covered by the agreement is estimated at approximately € 4 million (approximately SEK 40 million) plus a monthly license fee of 4% and the sale of components.


South Africa is a country with high solar radiation and high energy prices. Following positive signals from industrial customers, Greenline Africa has signed a framework agreement with Absolicon Solar Collector AB on the acquisition of a production line that manufactures Absolicon’s concentrating solar collectors T160. Greenline Africa is a team of dedicated experts in sustainability who have worked with solar heat for many years before finding Absolicon. The first contact took place in the autumn of 2018 and in February 2019 the parties first signed a confidentiality agreement and then an memorandum of understanding. Over the past five months, the company has presented Absolicon’s concept for some twenty companies in different industries and for financiers who want to invest in a production line in South Africa.

1. Sales of the production line

The production line is of the same model as the company already delivered to the Sichuan province with two six-axis robots that have the capacity to manufacture 50 MW solar collectors (100,000 m2) per year. Together with the hardware, Absolicon supplies consulting support for marketing work and technical training. The operators receive training in operating the production line while sales personnel and technicians receive training in projecting solar collector installations. The total value of hardware and activities covered by the agreement is estimated at approximately € 4 million (approximately SEK 40 million).

2. License to manufacture T160

For the right to manufacture T160 under the Absolicon intellectual property protection, to take part in future product development and to use Absolicon’s brand, a monthly license fee is charged of about 4% on the sales value.

The solar collector T160 is designed to produce heat and steam for industries and district heating networks. The T160 has the world’s highest measured optical efficiency for parabolic solar collectors and is the only one in the world with the quality certification SOLAR KEYMARK.

Absolicon has submitted or been granted eleven patent families where seven patent families directly protect the design or manufacture of T160. The other four patent families protect future products and simulation methods.
The production line in full production produces on a shift of 50 MW solar collector (100,000 m2) per year with sales value of €20 million, which with a 4% license fee would mean €0.8 million per year in license revenue. However, Absolicon’s estimate is that it takes several years before Greenline Africa developed the solar heating market for industries in South Africa so that these volumes can be achieved.

3. Material supply

Through the agreement, Absolicon ensures access to patented components and high-quality inputs that are partly manufactured locally in South Africa.
At full production, the production line needs to buy material for € 10–15 million (100–150 million) per year, where 30% of purchases may go through Absolicon and 70% from Greenline’s own subcontractors. The outcome for Absolicon depends to some extent on the result of Absolicon’s ongoing material investment where improved materials are being developed.

Sales of process equipment from Solar ++

In addition to sales from Absolicon, it is also likely that Saravanos Solar++ AB, which is 50% owned by Absolicon, will supply process equipment to the solar heating installations. Solar++ first product is a solar powered evaporator, an example of process equipment that is in demand by dairies and pharmaceutical companies. Solar++ has sold a first evaporator for € 450,000 (about SEK 5 million) to a Greek mining company which is now under construction.

Offer to join as a partner in the production line

Combined with the sale, Absolicon has been offered the opportunity to enter as a minority shareholder with ownership in the production line and Absolicon has opened up a capital contribution of up to € 1M. Such a shareholding by a foreign technology supplier would open for favorable financing in South Africa.

The framework agreement describes general principles

The framework agreement is not binding but prescribes the overall principles of the separate agreements to be established. The estimated value of the sale may change as well as the final design of financing, ownership distribution and the production line’s production capacity.
If Greenline Africa does not fulfill its commitments in each step, they lose the right to implement the purchase and then have the opportunity to get back part of the purchase price, but never for Absolicon’s costs incurred.

Industry sectors that have shown interest in South Africa

The energy market in South Africa is changing rapidly. Large industries often use coal or gas. Several of the large multinational companies have central policy decisions to reduce carbon dioxide emissions.
Many of the smaller industries, for historical reasons, use electricity for process heat. Electricity prices have, however, risen sharply in recent years, and in combination with week-long power outages, they are looking for companies for other solutions.
Examples of industries in different sectors that Greenline Africa is in contact with:

Pharma Q
Large amounts of hygienically clean steam are used in the pharmaceutical sector. Pharma Q in Johannesburg is a pharmaceutical company that today uses a gas fired boiler of 20 MW. The first step would be 1-2 MW (2000 m2 – 4000 m2) to preheat feed water to the boilers.

Coca-Cola Beverages Africa
The beverage industry consumes large amounts of energy. Coca-Cola Beverages Africa in Pretoria is a beverage company that wants to reduce its combustion of coal to reduce CO2 emissions. Greenline participates in a contract with the goal of reducing coal burning by 40% in a factory. In total, the company has 32 beverage factories in the region.

Woodlands Dairies
In South Africa there are many small and large dairies that need heat, among other things to pasteurize the milk. Woodlands Dairies in Port Elizabeth is dairy with a 20 MW boiler. The first step has been to offer preheating of feed water. Two smaller dairies have received quotes for solar collectors which have shown about 4-6 years of repayment.

Delivery time and delivery capacity

Now more detailed contract writing is taking place. The payment is made stepwise in the same way as in the previous sale of the production line to Sichuan province.
The first sales of pilot installations of T160 in South Africa are expected during the second half of 2019. Solar collectors for these installations are supplied from Sweden. Inspection of the finished line in Sweden before it is sent to South Africa is expected to take place during the first half of 2020. The production line is expected to be operational in South Africa during the second half of 2020.
The delivery of the production line to South Africa can be delivered with the resources of Absolicons existing organization. However, we need to strengthen the organization in order to be able to deliver several production lines in parallel to other stakeholders.
Absolicon is a listed Swedish solar energy company, specializing in concentrated solar heating. The solar collector T160 operates up to 160 ° C and has the highest optical efficiency ever measured for a commercially available small parabolic trough.
After achieving groundbreaking performance and delivering a first production line to the Chinese province of Sichuan, Absolicon has built a robotized production line in Sweden for demonstration for interested customers and for own production of solar collectors.
Each production line has the capacity to produce a solar collector every six minutes, 50 MWp (th) annually. The company combines solar energy research with sales of solar collector fields to industries that need heat and steam and complete robotic production lines for T160.

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