Renewable energy solutions provider SOLA Group has secured R400-million to build commercial and industrial solar photovoltaic (PV) facilities across Southern Africa.
The fund will enable 40 MW of solar PV projects to be built without capital expenditure (capex) by electricity off-takers, the company said on Monday.
SOLA Group partnered with African Infrastructure Investment Managers (AIIM) and Nedbank Energy Finance to provide solar PV solutions for businesses that are in need of electricity security.
“This partnership brings together three highly experienced entities whose combined skills offer consumers clean energy solutions at a time when our country desperately needs it,” SOLA Group chairperson Chris Haw commented in a statement.
SOLA Group has already signed 15 MW of solar PV projects through the fund, including several breweries and other industrial facilities around South Africa. Through the assistance of the projects, consumers pay for their clean energy through a tariff that is typically 20% lower than that of State-owned Eskom or their municipal provider’s rates.
Haw further explained that the model of electricity generation that incorporated both centralised and distributed electricity would improve the ability of South Africa to meet energy demand, reduce electricity costs and strengthen resilience to outages.
The partnership follows shortly after Eskom’s announcement of a R20.7-billion loss for the 2019 financial year and Finance Minister Tito Mboweni’s announcement of a R59-billion financial support package for the embattled utility over the next two years.
“Investing in clean energy infrastructure is a key aspect to bolstering the African economy,” said Mitesh Pema, Investment Director at AIIM, the infrastructure arm of Old Mutual Alternative Investments.
According to Haw, funding these renewable energy projects would enable industrial facilities to access secure and cheaper power, freeing up capex for investment into their core business activities.
Earlier this year, Former Energy Minister Jeff Radebe granted permission to the National Energy Regulator of South Africa to license small-scale embedded generation projects from between 1 MW and 10 MW in size before the Integrated Resources Plan (IRP) is finalised.
As a result, allowing for small-scale embedded generation of electricity is a key lever for the government to enable flexible electricity generation, and ultimately the transition to a low-carbon economy, Nedbank CIB energy finance principal Duncan Abel noted.
“The private sector also has a role to play in investing in electricity infrastructure and making a contribution to the energy mix,” he added.