Energy

HOWWE FUND BUSINESSES IN THE
ENERGY SECTOR

FACILITATING ECONOMIC DEVELOPMENT THROUGH CLEANER ENERGY

 

Facilitating Economic Development through Cleaner Energy, the Energy Strategic Business Unit (SBU) was formed in 2020 to consolidate and focus the previous Green Energy mandate of the Industrial Infrastructure Unit in facilitating the energy transition and ensuring sustainable energy security in South Africa and the rest of the continent in support of growing economies.

 

The South African energy sector is currently undergoing several impactful transformations, moving from traditional fossil fuel power sources to lower carbon environmentally sustainable technologies and business models such as Renewable Energy (e.g. Solar PV, Wind, Biomass and Hydropower), Energy Storage Technologies, Green Hydrogen, Distributed Generation, Mini and Micro Grids, Energy Efficiency and Management, etc.

 

In support of the energy transition, the South African Government issued the updated Integrated Resource Plan (IRP2019), which presents a major shift towards these low carbon emitting technologies.

 

With a specific focus on stimulating local, regional, and continental economic activity through targeted funding to and investments in the energy value chain with significant development impact, such as support for:

  • The operational and ownership participation of black / women / youth technical partners / developers / operators
  • The increased adoption of new (but proven) energy generation and storage technologies and innovative business models to ultimately justify the establishment of local production capacity of these components / systems to not only supply the local market, but also for export to the continent and the rest of the world.

 

We target opportunities at bankable stage, ranging in size from Utility Scale through to Small-Scale Embedded Generation, thus supporting both opportunities aimed at the Southern African Government’s Independent Power Producer Procurement Programmes and opportunities in the private sector, specifically in the Commercial & Industrial space.

 

We focus on viable energy projects that boost the country’s energy supply security whilst not impacting the environment adversely. To that end, we support projects that focus on the reduction or avoidance of carbon emissions.

 

We also manage several funds, which allows us to offer attractive funding terms for Clean Energy Generation and/or Efficiency opportunities. The unit also continues to build strategic partnerships with commercial banks, other Development Finance Institutions, Private Equity Funds, and Investment Houses focused on investing in the Energy space in general and in Renewable Energy specifically. IDC always prefers to co-fund opportunities with one or more of these funding partners.

 

WHO AND WHAT WE FUND?

 

The SBU provides funding in the following sub-sectors of the value chain:

 

  • For own use by companies in the Commercial & Industrial (C&I) space,
  • By Independent Power Producers (IPPs) for sale under long term off-take agreements, such as Power Purchase Agreements (PPAs) to:
    • Energy Intensive Users, such as mines, chemicals processing companies, smelters, etc.
    • Other C&I companies
    • Eskom under any of the Government’s Independent Power Producers Procurement Programmes, e.g., RMIPPPP, REIPPPP bid windows, etc.

EXAMPLES OF ENERGY GENERATION OPPORTUNITIES THAT WE CAN CONSIDER FOR FUNDING SUPPORT INCLUDE:

  • Renewable Energy (Solar & Wind) deployments
  • Gas-to-Power
  • Biomass-to- Power
  • Hydropower
  • Coal to power technologies with proven carbon sequestration processes and complying to emission standards
  • Micro & mini grids
  • Proven Energy Storage technology deployments
  • Cooling-as-a-Service
  • Heating-as-a-Service
  • Deployment of Fuel Cells
  • Waste-to-Energy
  • Heat-to-Energy
  • Green Hydrogen

INVESTMENTS IN THE REST OF AFRICA

The project must be of direct benefit to South Africa in any of the following ways:

 

  • Must promote regional economic development with linkage to SA
  • Upstream / Downstream businesses within IDC value chains
  • Must develop and integrate regional value chains in line with IDC priority sectors
  • Must support the implementation efforts of the AFCFTA in order to entrench the development of regional VCs and a move away from a reliance on offshore supply chains
  • The minimum size of the total project funding requirement must be:
    • R5-million SACU-based investments
    • USD 3 million for SADC-based investments
    • USD10-million for investments in countries outside SADC
    • Rand, US Dollar and Euro-based funding are available.

HOW TO

APPLY FOR FUNDING

Application for funding should be in writing and should include an executive summary and a business plan.

STEP 1

BUSINESS PLAN

Draw up a well-researched business plan, stating a compelling case for funding

STEP 2

REGISTER ONLINE

*Applications can also be submitted at the IDC office

STEP 3

UPLOAD APPLICATION

Upload your application with the relevant documents, certificates and business plan

STEP 4

PROCESS APPLICATION

IDC will confirm that it has received your application. While processing we may ask you to supply extra information or documentation

STEP 5

APPROVAL STATUS

IDC will give you feedback on the outcome of your application, in writing. If your application is successful, due diligence will be conducted on your business.

STEP 6

LOAN CONTRACT

Once the IDC has satisfied itself of your bona fides, you will be asked to sign a loan contract

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