GuarantCo, part of the Private Infrastructure Development Group, and British International Investment (BII), the UK’s development finance institution, have partnered with South African energy trading company Etana Energy to unlock $500 million for renewable energy projects.
The deal involves $100 million in default guarantee financing – split equally between GuarantCo and BII – marking South Africa’s largest energy wheeling framework transaction. This innovative approach will provide independent power producers with revenue certainty, enabling the development of approximately 500MW of new wind and solar capacity over the coming years.
The financing is expected to accelerate South Africa’s energy transition by replacing fossil fuel generation, cutting 1.2 million tons of CO2 emissions annually and creating jobs. This initiative also aligns with the Just Energy Transition Partnership, an international program supported by several governments, including the UK, to accelerate South Africa’s shift to renewable energy.
Etana Energy – whose shareholders include H1 Holdings and UK-based Chariot Limited — will use the guarantee to purchase electricity from private renewable generators and sell it to business customers, leveraging South Africa’s regulatory reforms that now allow private power sales.
“Local businesses need low carbon, cost-competitive electricity to remain relevant and viable. Etana’s aggregation model offers a way to meet these needs while enabling new renewable energy capacity to be built. This guarantee facility is a critical piece of the puzzle for a relatively new company like Etana to be a bankable offtaker for IPPs,” said Evan Rice, Etana Energy CEO.
The agreement underlines ongoing international support for South Africa’s renewable energy sector and demonstrates the growing role of innovative financing in achieving sustainable energy goals.
