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.