South Africa: Standard Bank to underwrite $1 billion debt financing for PV projects

08. November 2012 | Applications & Installations, Industry & Suppliers | By:  SHEM OIRERE

Standard Bank Group will underwrite $1 billion worth of debt for the first batch of photovoltaic and wind projects, which signed contracts with South Africa’s Department of Energy under the country’s Renewable Energy Independent Power Producer Programme (REIPPP) on November 5.

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The bank is finalizing the financial close of the second bidding window.

The bank said in a statement that the underwriting is equivalent to a third of the total debt financing for six photovoltaic projects worth 235 MW and five wind projects worth 338 MW. The banking group did not say which of the 18 photovoltaic developers, picked under round one last December, will benefit from the underwriting, however.

"The associated debt funding is a third of the total R27-billion ($3.1 billion) that is being committed by banks in the form of debt and makes Standard Bank Group the largest funder of the 28 wind and solar power projects awarded in this round," it said in a statement released.

"The bank will provide comprehensive corporate and investment banking services to all its clients, including underwriting R9.4-billion ($1 billion) worth of debt, providing interest and currency hedges, carbon trading credits, and corporate bonding and guarantee facilities," it added.

It has also said it has taken an equity stake in four projects. However, it declined to name them.

According to the bank’s executive vice president, Power & Infrastructure Finance Alastair Campbell, "Standard Bank will be ready to disburse funding for most of the projects as soon as all documentation is finalised and hedges are closed."

Eighteen photovoltaic developers are among those that signed contracts on November 5 for 631.5 MW worth of projects under the ambitious REIPPP, which targets generation of 17,800 MW an equivalent of 42% of South Africa’s new generation from renewable sources by 2030.

The bank’s Head of Power & Infrastructure SA Advisory and Coverage, Ntlai Mosiah said, "The successful conclusion of the first procurement process has been a very exciting and important step forward in attracting local and international private players into South Africa's energy mix."

He added that the bank is finalizing the financial close of the second bidding window and looking to support the third bidding window. "We have already committed a total of R6.1-billion ($704 million) of debt out of a total R19-billion ($2.1 billion) to preferred bidders on the second bidding window. The second programme is smaller than the first and will have a total of 19 projects. Standard Bank is supporting preferred bidders on five of these projects," he said.


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