From parking lot to powerhouse – Mulilo’s plan to become a billion-dollar company

Construction and property magnate Johnny Cullum was looking for advice on aeroplanes when he started a conversation with former motor car 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 Aberdein said, “This is a good opportunity”, 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).

“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,” Cullum said. 

“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, Cullum had already started what is now a leading construction company, CSV Construction, with a staff of over 500.

He was also 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 learned as we went along,” he said.

Clearly, something worked well because Mulilo became a successful participant in the 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).

This happened under the leadership of Cullum as its CEO, Chris as its chairman, and a former university colleague, Johannes Coetsee, as a director.

With more than 90 employees now, 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 420 MW of solar PV and wind projects in the country and has been awarded another 1,263 MW of public and private projects, which are nearing financial close.

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 30,000 MW 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,” Cullum 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. ”

He said 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 the global infrastructure investment fund Copenhagen Infrastructure Partners (CIP).

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.

Cullum 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 Eskom COO, has taken on the role of chairman, previously held by Aberdein, 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,” Cullum said. 

“This wasn’t an exit strategy but rather an accelerated path of growth for my personal investment in Mulilo. The deal with CIP is absolutely a growth strategy.”

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. 

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 Cullum’s time at the helm of Mulilo.

But the first was the initial trip that Cullum and Aberdein 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,” Cullum 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 150 MW of solar PV and 240 MW of wind power. 

“That was a massive highlight for us,” Cullum 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 said 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 Cullum’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.

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.

Companies that are awarded projects within the programme must spend up to 2.5% of their turnover on economic development programmes for communities within a 50 km radius of the project site. 

This requirement formed part of the bidding process and accounted for 30% of the bid adjudication at the time.

Cullum 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 out their socio-economic 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,” he said.

Cullum is 62 and has no intention of retiring, although he does intend to stop working 10-to-12-hour days. 

He said 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.

But Cullum 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,” Cullum 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 added.

Lastly, Cullum 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.

This article was written by Mariam Isa, an independent journalist, and Chris Yelland, EE Business Intelligence.