Independent power company Globeleq has completed a $37-million senior debt restructuring of its 11 MW Aries and 11 MW Konkoonsies solar plants, in the Northern Cape.

The debt restructuring was led by financial services firm Standard Bank.

Globeleq previously completed the debt restructuring of the Jeffreys Bay Wind Farm, in the Eastern Cape, and the De Aar and Droogfontein solar plants, in the Northern Cape, in August 2021, and the Soutpan solar plant, in the Free State, in January 2022.

By lowering the cost of debt for the projects, the restructuring allows for a significant reduction in wholesale electricity prices from the plants; creates a more efficient capital structure, enabling release of funds for shareholders to reinvest in the power sector; and accelerates equity distributions to the Aries and Konkoonsies communities and black economic empowerment shareholders.

Both Aries and Konkoonsies began operating in 2014 as part of South Africa’s Renewable Energy Independent Power Producer Procurement Programme. Globeleq acquired the majority interest of the plants in 2019.

Globeleq has managed the full scope of operations and maintenance at both plants since May 2021, achieving an average availability of over 99%.

“Restructuring the financing terms of these projects continues to be of significant benefit to [State-owned utility] Eskom and to South African consumers. We have reduced the cost of power at these two plants by around R129-million over the remaining ten years of the power purchase agreement.

“Overall, Globeleq has now restructured six of our eight plants in South Africa using the Department of Mineral Resources and Energy’s IPP Office Refinancing Protocol. These efforts demonstrate our desire to be a long-term producer of cost-effective renewable power in South Africa to benefit energy users and encourage investment in the renewable energy sector,” says Globeleq CEO Mike Scholey.

“We are pleased to have partnered with Globeleq again and taken over the debt financing of the Aries and Konkoonsies solar projects, allowing for cost savings to be passed through to Eskom and, ultimately, to the end-consumers.

“Standard Bank is committed to being a leading player in the energy sector in South Africa,” adds Standard Bank energy and infrastructure finance executive Sherrill Byrne.