Absa Corporate and Investment Banking (CIB) on Monday said it would provide R10.8-billion of debt funding to a total of six projects, comprising wind, solar photovoltaic (PV) and concentrated solar power (CSP), under the third round of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

Last week, the Department of Energy (DoE) announced that a total of 17 projects across various technologies, which were expected to produce about 1 472 MW of renewable energy a year, had achieved preferred-bidder status in the latest REIPPPP round.

Absa CIB committed about one-third of the total debt committed overall by South Africa’s commercial banks for the REIPPPP’s third bidding window, with the projects supported by Absa totalling a combined yearly power output of 635 MW.

“This represents a significant commitment from the bank to the establishment of a renewable energy sector in South Africa. We will be ready to disburse funding as soon as all documentation is finalised and hedges are closed. We will be financing three of the seven wind projects, both of the CSP projects and one of the six PV projects,” Absa CIB head of resource and project finance Theuns Ehlers commented.

He added that Absa started working closely with local and international independent power producers (IPPs) from the time South Africa’s IPP plan was announced.

“The successful conclusion of the third procurement process has been exciting and a big step forward in attracting local and international private players into South Africa’s energy mix. We are encouraged by the fact that this was a highly competitive and open bidding process.  Hopefully, this success will also be a catalyst for other programmes, such as cogeneration and cross-border IPPs,” said Ehlers.

The winning bidders were expected to sign project agreements with the DoE by July 30, 2014, after which developers would have about one month to finalise all documentation and foreign currency hedging before project roll-out was set to begin.

The fourth bidding round was expected to start in July 2014 and be finalised a year later.

Through the REIPPPP, South Africa aims to secure a total of 17 800 MW of renewable energy, or 42%, of South Africa’s new generation capacity by 2030.