RMB has joined forces with the well-established South African-owned Independent Power Producer (IPP), SOLA Group (SOLA), to secure a substantial R2.8 billion debt and equity package. This financial endeavor aims to support the development of a pioneering 150MW multi-offtake Solar PV Project situated near Virginia in the Free State region.
The initiative marks a pioneering step in South Africa’s energy landscape as it pioneers one of the country’s inaugural multi-buyer programmes.
Anticipated to achieve commercial operations by mid-2025, the project operates under several power purchase agreements (PPAs).
Notably, it stands as one of the largest Solar PV installations in the South African power market, representing the inaugural utility-scale multi-buyer platform in the nation.
Designed to supply power to multiple independent customers, the project also includes an unallocated segment destined for sale to diverse clients and electricity traders. Consequently, it stands as the first wheeled project offering a flexible power solution, catering to corporates seeking cost-effective green electricity through dynamic, shorter-dated contracts.
“This is the fourth utility-scale renewable wheeling project that SOLA has closed and commenced construction on in the last 15 months. The project firmly establishes SOLA as South Africa’s leading IPP engaged in the sale of power to private buyers and brings the Group’s portfolio to 581 megawatts of wheeling capacity currently under construction,” says Katherine Persson, the head of SOLA Assets.
The complex solution being implemented by SOLA requires deep sector expertise, which the SOLA team has gained over a 15-year period, having initially focused on small scale commercial and industrial projects and then ultimately transitioning to utility scale projects with the lifting of the private power generation cap. This dynamic journey makes SOLA one of the leading South African owned IPPs in the market.
“This project is a first of its kind given the merchant market electricity trading strategy being implemented and led by experienced IPP, SOLA. From a partnership and financing perspective, SOLA reached out to RMB, and the respective teams formulated a highly structured and innovative financing solution straddling both debt and equity. The senior debt financing required flexible structuring whilst the equity and shareholder level financing allowed us to support and partner SOLA with a bespoke funding package. This unique equity financing solution reaffirms our position as the leading infrastructure equity financing house in the market,” says Kwabena Malgas, Head: Infrastructure Equity at RMB.
RMB also acted as Joint Mandated Lead Arranger under the senior debt tranche and Equity Bridge Loan, and supported UBuzwe Energy (UBuzwe), who is a key client, into the structure, thereby acting as sole Preference Share Provider for the project.
“The senior debt package for this transaction was particularly innovative, offering shorter-dated financing solutions which align with the dynamic short-term demand for green electricity in the sector. We are proud to be a part of this market-shaping transaction, which will further strengthen our position as a leading financial partner in the private power market, and are pleased to begin what we believe will be a long-standing partnership with leading IPP, SOLA,” concludes Sindisiwe Mosoeu, Senior Transactor in the Infrastructure Sector Solutions team.
