Thursday, November 8, 2012

Standard Bank commits R9.4bn to 11 renewables projects

JSE-listed Standard Bank reports that it is backing 11 of the 28 wind and solar projects selected following the first bid window under South Africa’s Renewable Energy Independent Power Producer Programme (REIPPP) and that it has underwritten R9.4-billion worth of debt for the developments.

The bank’s clients will collectively develop 338 MW of the onshore wind and 235 MW of solar photovoltaic (PV) capacity, which should be operational during 2014.

On November 5, the South African government and Eskom signing the power purchase, implementation and direct agreements for projects collectively representing an investment value of around R47-billion and wind and solar capacity of around 1 415 MW.

Developers have until November 16 to finalise their documentation and foreign currency hedges, after which projects can be built.

The debt-funded portion will be R27-billion, making Standard Bank, which has also taken up equity in four projects, the largest funder of the initial REIPPP projects.

Power and infrastructure finance executive VP Alastair Campbell reports that it will financing five out of the eight wind projects and six of the 18 solar PV projects. The group is also providing interest and currency hedges, carbon trading credits, and corporate bonding and guarantee facilities.

Head of power and infrastructure advisory and coverage Ntlai Mosiah adds that the bank is also already preparing for financial close of the second bidding window and is preparing to participate in the third bid window.

Projects identified during the second bid window are expected to close in the first quarter of 2013, while the third bid window is due to close on May 7, 2013.

“We have already committed a total of R6.1-billion of debt out of a total R19-billion to preferred bidders on the second bidding window,” Mosiah reports.

A total of 19 projects have been selected as preferred bidders for the second bid window and Standard Bank is supporting five projects.

Government initially planned to procure 3 725 MW of renewable capacity by 2016. But work is currently under way to convert the REIPPP into a rolling programme, with Minister Dipuo Peters confirming in late October that an additional 3 200 MW would be allocated to the scheme and its schedule extended to 2020.

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