Financial services group Rand Merchant Bank (RMB) has helped South African independent power producer (IPP) SOLA Group raise a R2.8-billion debt and equity package for its 150 MW multi-offtake solar photovoltaic (PV) project near Virginia, in the Free State.
The project is one of the first multi-buyer programmes in South Africa and is expected to reach commercial operations under several power purchase agreements (PPAs) in the middle of 2025.
The project is one of the largest solar PV installations to be built in South Africa and the first utility-scale multi-buyer platform to be concluded in South Africa. It is set to sell power to multiple independent customers and includes an unallocated portion that will be sold to multiple clients and electricity traders, RMB said.
This is, therefore, the first wheeled project to offer a flexible power solution for corporates looking to buy cost effective green electricity through shorter-dated, dynamic contracts, it added.
“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 structured and innovative financing solution straddling 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,” said RMB infrastructure equity head Kwabena Malgas.
“This is the fourth utility-scale renewable wheeling project that SOLA has closed and started construction on in the past 15 months. The project brings the SOLA Group’s portfolio to 581 MW of wheeling capacity currently under construction,” said SOLA assets head Katherine Persson.
The company initially focused on small-scale commercial and industrial projects, and then transitioned to utility-scale projects with the lifting of the private power generation cap.
Meanwhile, RMB also acted as joint mandated lead arranger under the senior debt tranche and equity bridge loan, and supported key client UBuzwe Energy in the structure, thereby acting as the sole preference share provider for the project.
“The senior debt package for this transaction was innovative and offered shorter-dated financing solutions that align with the dynamic short-term demand for green electricity in the sector.
“This transaction will further strengthen our position as a financial partner in the private power market, and we are pleased to begin what we believe will be a long-standing partnership with SOLA,” said RMB infrastructure sector solutions senior transactor Sindisiwe Mosoeu.