Investment bank Nedbank Capital, which currently has an R18-billion debt exposure to 23 of the 64 approved renewable-energy projects in South Africa, expects to complete a review of the portfolio in early 2014, with the intention of allowing the bank to continue with its high-level participation in future private energy opportunities that are expected to arise in the coming few years.

Energy head Sakkie Leimecke tells Engineering News Online that, while no restrictions have been put in place with regards to the investment bank’s participation in additional renewables projects, the current exposure is significant for a bank of its size. Various options are, therefore, being assessed to ensure that the bank is positioned to take advantage of future independent power producer prospects, whether these relate to additional renewables projects, or baseload coal or gas developments.

The Department of Energy is currently considering whether or not to select further wind and solar photovoltaic projects in addition to the 17 appointed in late October, following a highly competitive third bidding round. However, some doubt has been cast on that prospect by the recent publication of an Integrated Resource Plan Update Report, which proposes materially different technology allocations for the energy mix generally, as well as the renewables portion specifically. Government will accept public comment on the update until February 7 and expects to finalise an updated generation roadmap during the first quarter of 2014.

Leimecke says Nedbank Capital is keen to participate in the upcoming bidding round for concentrated solar power projects in March 2014 and remains optimistic that baseload coal and gas bidding processes will be launched in the first half of next year.

The internal renewables portfolio review, he adds, will help in determining the bank’s approach to these opportunities, as well as the level of its future ambition.

Various options will be interrogated, including the creation of a green bond, or the sale of portions of the portfolio to  investors.

As things stand, Nedbank Capital continues to be a large holder of renewables assets and has refrained from syndicating any significant portion of its portfolio. “But at some point, we may need to refocus and we are looking at how best we should manage that portfolio,” Leimecke says.

However, he stresses that there is no pressure on the unit for any impulsive sell-down activity.