26 Oct Preferred small renewable energy producers announced
Joint Media Release
Ten small preferred energy projects bidders under the Department of Energy’s Independent Power Producer Programme where announced by the Minister of Energy Tina Joematt-Petterson at the South African International Renewable Energy Conference on 5 October 2015.
Announcing the preferred bidders Minister Joemat-Pettersson said that the contribution of these projects would go beyond the provision of clean renewable electricity. She said these projects would support the broader national development objectives including economic development, social upliftment, job creation, broad-based economic empowerment and development of new smaller participants into the energy sector.
The programme caters for projects up to 5MW. The preferred projects comprise six solar photovoltaic (PV), two wind and two biomass technologies. These projects require long-term loan financing, particularly for BEE and BBBEE shareholders.
The Industrial Development Corporation (IDC) will provide funding to five projects. This will be provided in collaboration with Mergence Investment Managers (Mergence) – a majority black-owned specialist asset manager.
The IDC will provide an attractive interest rate through a green credit line provided by the French Agency for Development (AFD).
IDC’s head of industrial infrastructure Lizeka Matshekga said IDC would play a critical role in mobilising financial support and crowding in other funders. She said: “The IDC has developed a standard financial models and financing agreements that the project promoters can use so that each project does not have to carry these costs individually.”
The IDC will finance a significant part of BEE in line with its programme to support the increased participation of black entrepreneurs in the energy space.
Senior analyst at Mergence Peta Chennells said Mergence saw an opportunity to provide long-term funding in an area where funding was not readily available – in line with Mergence’s commitment to stimulate growth and job creation across the renewable energy value chain.
“By collaborating with institutions like the IDC and AFD, and drawing on its experience of providing close to R1bn of senior secured debt under the main REIPPP programme, Mergence has been able to secure more opportunities for its institutional investors to participate in investments like these that closely match their investment horizon with attractive returns. We would also like to commend the developers and the Department of Energy in making sure that these projects are successful”.
AFD, the Development Finance Institution of France, provided the IDC with long-term, low-interest rate funding and technical assistance for the development of renewable energy and energy efficiency projects in South Africa. AFD is very pleased that its funding has helped support five projects in the first round of the Small Projects Independent Power Producer Programme, particularly given that no funding was available for such projects under traditional market conditions in South Africa.
Special advisor to the French President on climate change and head of French delegation to SAIREC, Marie-Hélène Aubert said:
“A few weeks before the start of the COP 21 in Paris, South Africa has taken an important step in pursing the development of small-scale renewable energy projects. France, as the future president of COP 21, attaches great importance to the solutions agenda, demonstrating that concrete steps can be taken on the ground to tackle climate change.”
For more information, please contact:
Peta Chennells: Mergence
Tel: (021) 433 2960
Odette Bahati: AFD
Tel: (011) 540 7100