Market potential
Starting in the mid-sixties Botswana has seen a rapid growth in economy and prosperous development success in the country. In 2021 Botswana is expecting an economic growth of 9.7%.
Located at the center of Southern Africa, positioned between South Africa, Namibia, Zambia, and Zimbabwe, Botswana is a country enjoying high solar radiation and is very well suited for solar energy production.
Currently oil represent 63 % of the final industrial energy consumption in Botswana. Solar thermal energy provided by Absolicon T160 Solar collector have the potential to replace 20 % of fossil products used for conventional heating systems, avoiding emitting 500 000 tons of CO2 annually in Botswana.
Planet Soar is a renewable energy company based in France, that supports several actors in multiple countries in the deployment of renewable energy project infrastructure. Planet Soar provide solution such as financing, development, supply chain and project management. Together with its partners, Planet Soar deploy or supply the most innovative products and solutions to their respected markets.
Planet Soar signed a framework agreement for setting up a production line in France during early 2021 and is now expanding the collaboration with Absolicon with plans for a second production line in Botswana to provide the region with advanced solar collectors.
The collaboration is built on the qualified network and experience of Planet Soar in Botswana as well as their commitment in helping those who are taking action for the future of the planet.
Content of the framework agreement
The framework agreement describes the separate agreements to be drawn up in the process. Absolicon’s proceeds from the sale can be grouped into three groups: acquisition of the line, license revenue and revenue from material sales.
1. Sale of the production line
The production line is of the same model as Absolicon has in Sweden and which the company has already delivered to Sichuan Province. The line with two six-axis robots has the capacity to produce 50 MW solar collectors (18 000 collectors) per year. Together with the hardware, Absolicon provides consulting support for marketing and technical support, development and technical training.
The total value of hardware and activities covered by the agreement is estimated at € 4-5 million.
2. License to manufacture T160
For the right to manufacture T160 under Absolicon’s intellectual property protection, take part in future product development and use Absolicon’s trademark, a monthly license fee of approximately € 30/sold collector applies to the sales value.
The production line in full production produces on a shift 50 MW solar collector (18 000 collectors) per year with sales value € 20-25 million which with approximately € 30 license fee / sold collector would mean about € 500 000 per year in license revenue. Absolicon’s estimate, however, is that it takes time for Planet Soar to develop the solar thermal market for industries in the region so that these volumes can be achieved.
3. Material supply
Through the agreement, Absolicon ensures access to patented components and high-quality inputs partly manufactured in Botswana or locally at the installation site.
At full production, the production line needs to buy materials for € 10-15 million per year where 30% – 40% of purchases may go through Absolicon and 60% – 70% from local subcontractors. The outcome for Absolicon depends to some extent on the result of Absolicon’s ongoing material investment.
The framework agreement sets out overarching principles
The framework agreement prescribes the general principles for the separate agreements to be drawn up, and the steps to be taken before a binding agreement for the acquisition of the production line can be signed. Absolicon estimates today that the sales value of the agreement is at the lower end of the range of € 4-5 million. The framework agreement does not stipulate any binding minimum levels meaning that Planet Soar is obliged to order for a certain value. The estimated value of sales is subject to change as well as the definitive design of the production capacity of the production line.
If Planet Soar fails to meet its commitments at every stage, they lose the right to complete the acquisition and then have the opportunity to recover part of the purchase price, but never for Absolicon’s incurred costs.
Next steps
The cooperation is still at an early stage proceeding with online training and business development strategy. Following this, a more detailed contract will be drawn up and future payment will be made step by step in the same way as in the previous sale of the production line to the province of Sichuan.
