Absa negotiated and financed three renewable energy projects, which completed financial conclusion on February 23, 2023.
According to Absa, the three projects for Red Rocket Energy Ltd would include two 140MW wind farms in the Western Cape and one 84MW wind farm in the Eastern Cape.
The projects are anticipated to be worth R12 billion.
Absa has financed renewable energy projects across the continent, including South Africa’s REIPPP (Renewable Independent Power Producer Programme) schemes and commercial or industrial projects with private off-takers.
“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,” said Absa.
To present, the company has funded about 4GW of projects.
“The power generated by these three wind projects will be supplied to Eskom under 20-year power purchase agreements (PPAs) and, once operational, will have the capacity to supply approximately 480,000 South African households with power,” said Absa.
According to Colin King, principal in Absa’s Resource and Project Finance team, the latest transaction demonstrates the bank’s ongoing commitment to the sector and the acceleration of investments that have a long-term impact on the communities we serve while also contributing to the supply of much-needed new power generation capacity to the grid.
Red Rocket is a locally based, integrated renewable energy Independent Power Producer that develops, plans, builds, runs, and owns utility-scale grid-connected renewable energy projects throughout Africa.
The business presently has 606MW of operational and under construction projects, more than $1 billion invested, and a pipeline of more than 12GW of projects, 1GW of which will reach financial closure by the end of the year.
REIPPP timeline
The REIPPP initiative has been chastised for taking too long to bring additional power generating online.
Together with bringing additional electricity on board, it sought to ease South Africa’s transition away from coal and alleviate Eskom’s power output gap.
Busi Mavuso, CEO of Business Leadership South Africa, stated in September last year that South Africa has not experienced a seamless procurement since 2015.
With load shedding at an all-time high, President Cyril Ramaphosa has pledged a more targeted push towards renewables in the country.
The president proclaimed a national state of calamity over rolling blackouts during his state of the country speech, with the goal of eliminating red tape and expediting mitigation initiatives.
