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Johnny Cullum, outgoing CEO and founder of Mulilo Energy

Johnny Cullum, outgoing CEO and founder of Mulilo Energy
Former motor racing champion Chris Aberdein. (Photo: :©Tertius Pickard / Gallo Images)
Mariam Isa and Chris Yelland
By Mariam Isa and Chris Yelland
7 May 2024
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Construction and property magnate Johnny Cullum was looking for advice on aircraft when he started a conversation with former motor racing champion Chris Aberdein in a Cape Town parking lot sixteen years ago. It was the first time they’d met, but the conversation soon turned to load shedding and South Africa’s emerging energy constraints.

When Chris Aberdein said, “this is a good opportunity”, Johnny Cullum’s entrepreneurial mind clicked into gear, and they founded Mulilo Energy – now one of the country’s leading renewable energy developers and independent power producers (IPPs).

chris aberdein mulilo energy Former motor racing champion Chris Aberdein. (Photo: Tertius Pickard / Gallo Images)



“We did everything wrong. Firstly, I didn’t know Chris well, and if you want to start a company you need capital, you need to know what you’re doing, and you need a strategy or a plan,” Johnny chuckles. “We had none of those. I didn’t really know Chris, we had no capital, we didn’t have experience, and we didn’t have a plan.”

From small beginnings and a bakkie, Johnny had already started what is now a leading construction company, CSV Construction with a staff of over 500, and was busy expanding Airport City Property Holdings, another company he founded that owns and manages many large logistics, industrial and commercial buildings in the Western Cape.

He admits that he assumed moving into the country’s highly regulated, rapidly evolving, renewable energy industry would not be that different. “I thought this was going to be easy because I’d done property, and I thought that this was going to be more of the same. Little did I know. But we learnt as we went along.”

Clearly, something worked well, because with Johnny as its CEO, Chris its chairman, and a former university colleague, Johannes Coetsee, as a director, Mulilo became a successful participant in government’s Renewable Energy IPP Procurement Programme (REIPPPP), Risk Mitigation IPP Procurement Programme (RMIPPPP), and more recently in the Energy Storage IPP Procurement Programme (ESIPPPP).

Now with more than 90 employees, Mulilo occupies the 21st floor of the Portside green building in Cape Town, the city’s tallest, just one floor up from another well-known developer and IPP, Scatec. From this vantage point, Mulilo owns and operates 420MW of solar PV and wind projects in the country, and has been awarded another 1,263MW of public and private projects which are nearing financial close.

Target


Mulilo’s target is to develop, own and operate 6,000 MW of solar, wind and battery energy storage projects within the next five years, and to more than double its staff complement to 200 by the end of next year. It has identified a further 30,000MW development pipeline across the country, with plans to participate in the expansion of the country’s electricity grid infrastructure when the government and Eskom open this up to the private sector.

“It’s probably very optimistic, but that’s our strategy, and so far, it’s on track, and that’s what we’re working towards,” Johnny said. 

“I have always tried to apply 100-year thinking in planning all our projects, if that makes sense. With just about all the investments I’ve got involved in, I try to position them as high-return, long-term and sustainable. What I can tell you is that the plan for Mulilo is that it’s going to be at least a billion US dollar company within the next five years. Furthermore, we intend to make a high economic impact on the communities in the regions where our projects are situated, and to play a substantial role in solving load shedding and improving the lives of the 62 million people in our country.”  

In 2022, Mulilo’s profile in South Africa’s rapidly evolving energy landscape caught the attention of global infrastructure investment fund, Copenhagen Infrastructure Partners (CIP), and in July 2023 CIP bought an 87% stake in the company for in excess of $200-million – a striking vote of confidence in the country as well as the company.

Johnny chose to relinquish control of Mulilo soon after the deal was announced and indicated he would step down as CEO while continuing to serve Mulilo as a board member. He has recently been replaced as CEO by Jan Fourie, the former executive vice-president of rival renewable energy developer, Scatec.

Jan Oberholzer, the former COO of Eskom, has taken on the role of chairman, previously held by Chris, and Avra Moodley has recently joined Mulilo from Mainstream as head of legal.

“Obviously, there’s a bit of anxiety in giving up control, but it is important to note that I remain a shareholder in the business,” Johnny said. “This wasn’t an exit strategy, but rather an accelerated path of growth for my personal investment in Mulilo.”

The decision to sell a majority stake in the company was spurred by the fact that Mulilo’s previous shareholders had wanted high dividend payouts and minimum overheads – they were not really interested in reinvesting significantly in the business, he added. “The deal with CIP is absolutely a growth strategy.”

Being acquired by CIP, which is one of the world’s largest fund managers focused on greenfield renewable energy investments, was clearly one of the highlights of Johnny’s time at the helm of Mulilo.

China Longyuan Power Group


But the first was the initial trip that Johnny and Chris made early on to China in 2010 to persuade the China Longyuan Power Group, the largest wind turbine OEM in Asia at the time, to team up with Mulilo for onshore wind projects. “We convinced them that Mulilo was the top developer in South Africa, that we’re actually the best, and that they should partner with us,” Johnny said.

The partnership worked well, and the early wind farms which the two companies built near De Aar in the Northern Cape, with a total of 167 turbines, are among the best performing in the country.

The second big win for Mulilo was being awarded four projects in the third round of the government’s REIPPP Programme in October 2013, which amounted to a total of 150MW of solar PV and 240MW of wind power. “That was a massive highlight for us,” Johnny said.

He is modest about what he has achieved, both in business generally, and in South Africa’s renewables sector, which has been beset by red tape and politics. He says his background as a civil engineer – he has an honours degree in civil engineering from Stellenbosch University – taught him how to think.

“I’ve changed career three times – I’ve tacked over when I’ve seen opportunities. Between having a bit of an entrepreneurial spirit and just having a reasonable education… if you can think, you can work out how to do it. And there was an obvious opportunity in renewable energy.”

But construction is clearly Johnny’s passion. “Personally, I like building something. And then seeing where it stands. Not a balance sheet on a computer. The stock market doesn’t interest me,” he said.

Education


He is also passionate about education, saying that in South Africa, education is the solution to many a problem. This is evident in the work which Mulilo does within the social and economic development mandate of its REIPPPP contracts.

It is not widely known that companies which are awarded projects within the programme – which was launched in 2011 by the IPP Office of South Africa’s then Department of Energy – must spend up to 2.5% of their turnover on economic development programmes for communities within a 50 km radius of the project site. These requirements formed part of the bidding process and accounted for 30% of the bid adjudication at the time.

Johnny is the co-founder and trustee for Mulilo Community Trusts, and the Mulilo Economic Development Company which, among other initiatives, has established a tertiary education bursary programme. At present, it supports 140 students in tertiary education institutions across South Africa. The bursary includes all university fees and accommodation, as well as stipends and personal mentoring – with a pass rate of 96% currently. The company’s goal is to get that number of students up to 500.

Mulilo realised early on that many IPPs subcontract their socioeconomic obligations, and the money allocated is whittled away by fees to the other parties. “That’s why we decided to do it all ourselves. We run this programme internally, we do all the assessing, monitoring and payments, and every cent goes to the community”, said Johnny.

Johnny is 62 and has no intention of retiring, although he does intend to stop working 10-to-12-hour days. He says he will focus on his property portfolio, which he still wants to “grow out a little bit”, and look after some of the energy projects that he co-owns outside of Mulilo.

These include the Total Hydra large-scale hybrid solar PV and BES project currently under construction in De Aar – as well as the operational Kakamas Hydro Electric Power Plant in the Northern Cape. He is also contemplating making one of the two game farms he has in Namibia, his wife’s country of origin, into a sustainable tourist destination.

SA’s trajectory


But Johnny is positive about South Africa.

“I see a very good future in the country. I think that it’s always too easy for people to be negative, but I think what also happens – and it’s happened in our history before – is that just a small thing needs to change, and then big things happen,” he said.

This includes bringing an end to load shedding, which as of 5 May 2024 Eskom had managed to suspend for 39 consecutive days. The results were immediately felt through a pickup in manufacturing activity during April, according to the seasonally adjusted Absa purchasing managers’ index.

“If we can take this country out of load shedding, the add-on to our current GDP is going to be huge,” Johnny said. He feels that South Africa’s energy trajectory is heading in the right direction, with its path towards liberalisation of the electricity supply industry.

“With support from both the public and private sectors, if everyone works towards this end, the country will be close to achieving a big success”, he adds.

Last, Johnny advises young people in the industry not to be in a hurry to leave South Africa to work elsewhere. “Certainly, in our sector, there is a massive opportunity. It’s an extremely exciting space. And I think South Africa is one of the markets where they’re going to get opportunities that they are not going to find so easily in other countries,” he said. DM

Mariam Isa, independent journalist, and Chris Yelland, EE Business Intelligence.

© Copyright 2024 – EE Business Intelligence (Pty) Ltd. All rights reserved. This article may not be published without the written permission of EE Business Intelligence.

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