Three wind projects with a total capacity of 364 MW have reached financial close under Bid Window 5 of the South African Renewable Energy Independent Power Producer Procurement (REIPPP) program. Located in the Eastern Cape province of the country, the projects will supply electricity to state utility Eskom under a 20-year power producer agreement.
Funded by South African-based financial services group Absa – who served as the mandated lead arranger and lender – the projects were developed by integrated African independent power producer Red Rocket to the tune of R12 billion.
Following completion, the projects are expected to supply electricity to approximately 480,000 households in South Africa.
“Absa continues to support financing for renewable energy projects across Africa, including Government procured programs such as the REIPPPP and commercial and industrial projects with private off-takers, with more than 4GW’s of projects financed to date. This transaction strongly demonstrates our ongoing commitment to the sector and the acceleration of investments that make a sustainable impact on the communities we serve, whilst contributing to the supply of much needed new power generation capacity to the grid,” stated Colin King, Principal: Project Finance, Absa.
King added that, “The financing of projects in this sector is in line with Absa’s sustainable finance goals, which includes helping our clients on their journeys to becoming more sustainable, and also in assisting Eskom with the transitioning from fossil fuels to renewable energy sources, thereby significantly reducing greenhouse gas emissions in South Africa. The REIPPPP is critical in helping Eskom add renewable power generation capacity to the national grid, in line with the country’s just energy transition objectives and sustainable development goals.”
Red Rocket will invest in the equity of the projects alongside Old Mutual-owned fund manager, IDEAS Infrastructure II Sub-Partnership and Jade-Sky Energy.