The fund is for renewable projects under round one and two of the 20-year renewable energy independent power producer programme (REIPPP).
Although Standard Bank has financed over US$977 million of debt funding in the first round and expects to fund $652 million in the second round, the bank’s head of renewable finance and investment banking in South Africa, Alastair Campbell said, "At this point in time we have not decided which of the projects will benefit from the funding, but it is certainly our intention to bring ICBC into a number of the deals."
Solar PV projects underwritten by Standard Bank have a total capacity of 425.7 MW and include Greefspan, Herbert, Kalkbult, De Aar, Northern Cape (Site 1), Limpopo-Witkop and Limpopo-SoutPan under round one.
Preferred PV projects under round two underwritten by the bank include Linde, Upington Airport, Dreunberg and De Aar Northern Cape (Site 2).
"This is an extremely significant transaction. It highlights Standard Bank’s commitment to the renewable energy sector and demonstrates the strength of the partnership between Standard Bank and ICBC, the world’s largest bank," said Ben Kruger, Standard Bank Group joint chief executive.
"Standard Bank and ICBC will jointly provide debt financing on a project finance basis to companies that are awarded preferred bidder status under the country’s Renewable Energy Independent Power Producer (IPP) procurement programme. This will apply to projects where Standard Bank is, or will be, mandated as a lead arranger," said George Kotsovos, head of power and infrastructure finance at Standard Bank Group.
ICBC said its entry into South Africa’s renewable energy market was an opportunity to "raise awareness of the South African investment opportunity among Chinese suppliers as potential sources of contracting capability."
"In addition, the objective of this partnership is to facilitate the entry of investors into South Africa, and ICBC is excited about the opportunity to co-lend into renewable energy with Standard Bank, ICBC’s South African strategic partner, through to 2025," said ICBC chairman Jiang Jianqing.
Kotsovos said REIPPP requires large funding commitment and "the more sources of available capital the better."
"The flexibility that these long-term sources of capital offer allow us to structure deals appropriately," said Kotsovos.