Independent power company Globeleq has completed a R1.2-billion senior debt restructuring for its 31 MW Soutpan solar power plant, in Limpopo, one of the first solar power plants built under South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
The company explained on January 23 that, by lowering the cost of debt for the project, the refinancing allows for a significant reduction in wholesale electricity prices from the plant.
It also creates a more efficient capital structure that enables release of funds for shareholders to reinvest in the power sector and accelerate equity distributions to Soutpan’s community and black economic empowerment (BEE) shareholders.
“The successful Soutpan restructuring is an important transaction, which will save [State-owned] Eskom more than R160-million over the remaining ten years of the agreement. This is the fourth renewable project that Globeleq has restructured under the Department of Mineral Resources and Energy’s IPP Office Refinancing Protocol . . . supporting initiatives that benefit energy users and encourage investment while load shedding continues,” Globeleq CEO Mike Scholey said.
Financial institution Standard Bank led the restructuring of the debt, alongside the project’s original lender Vantage Green X Fund.
Standard Bank has been involved with Soutpan as mandated lead arranger and hedge provider since 2012 when construction on Soutpan started, Standard Bank infrastructure finance energy executive Sherrill Byrne explained.
Soutpan started operations in 2014 and Globeleq acquired a majority interest in the plant in 2019. Since then, Globeleq has managed the full scope of operations and maintenance, and has implemented a plan to enhance performance, efficiency and safety at the plant.
“Vantage GreenX has been a lender to the Soutpan project since 2013 and it has been pleased to play a meaningful role in the evolution of the sustainable energy market in South Africa.
“The restructuring of the finance on this project is indicative of a market that has matured, and which is well positioned to play an important and meaningful role in the quest to solve South Africa’s ongoing energy crisis,” Vantage GreenX MD Alastair Campbell said.