Standard Bank Group has underwritten approximately R12-billion of debt on various wind and solar mandates.
Alastair Campbell, Standard Bank Group's Head of Power Finance, says: "Standard Bank supported a number of bidders in the Renewable Energy IPP procurement process on which the first bid date has just reached conclusion. The mandated clients comprise 401MW of wind and 442MW of solar photovoltaic."
Should these projects succeed in achieving preferred bidder status, they will produce approximately 1,850 Gigawatt hours of renewable energy a year.
Mr Campbell says this represents a significant commitment from the bank to the establishment of a renewable energy sector in South Africa. The total allocation of 3625MW for the procurement process is likely to translate into approximately R75-billion of investment, with roughly R52-billion coming in the form of debt. Bidding for these projects closed on 4 November 2011.
The government is expected to announce preferred bidders for Bid Date 1 just before the start of the COP17 global climate conference scheduled to take place in Durban from 28 November to 9 December 2011.
Mr Campbell says Standard Bank Group has secured a number of further mandates to fund a variety of developers through the second Bid Date. The group has already financed five deals in other African countries worth $535-million, with a capacity of 500 megawatts of electricity.
Some of the consortia that Standard Bank Group has supported on Bid Date 1 include Basil Read, AE-AMD, Biotherm, Red Cap, Metrowind, ACED, Sun Edison and SARGE.
Initial interest in the first phase of the competitive bidding process for the development of renewable energy projects in South Africa suggests that it will be significantly over-subscribed, confirming that there is overwhelming interest from both local and international developers to invest in local power generation.
Four other bidding rounds are expected to take place roughly 6 months apart from March 2012 onwards to allocate the total 3625MW. In accordance with the countries long-term power plan, South Africa aims to secure a total of 17 800 megawatts of renewable energy or 42% of South Africa's new generation capacity by 2030.
"There is considerable appetite from developers and banks to invest in renewable energy projects in South Africa. Standard Bank has been working closely with a number of local and international groups for the past 18 months. We are well positioned to take advantage of the vast opportunities in the renewable energy sector, with an offering covering the whole suite of banking products," Mr Campbell says.
More than 300 potential renewable energy developers of mainly wind and solar have registered with the DOE, comprising about 27 000MW of interest and worth about R240-billion. Mr Campbell is confident that Standard Bank Group will play a meaningful role in the roll-out of these projects.
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