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Standard Bank Group is leading investor in South Africa procurement process


PV-TECH.ORG

By Nilima Choudhury

November 13, 2012

South Africa’s Standard Bank Group has emerged as the leading investor in the first round of the country’s renewable energy independent power producer (REIPP) procurement process, backing a total of 11 solar and wind projects.

The South African government has allocated 1,416MW for this first round of the procurement process, worth about R47 billion (US$5.3 billion) of fixed investment, of which the majority, around R27 billion (US$3.1 billion), will be funded by debt.

Standard Bank Group will provide comprehensive corporate and investment banking services to all its clients in the REIPPP programme, including underwriting R9.4 billion (over US$1 billion) worth of debt, providing interest and currency hedges, carbon trading credits and corporate bonding and guarantee facilities.

The bank’s clients include 338MW of wind and 235MW of solar PV, out of the combined 1,416MW per year expected to be produced by all the projects. Standard Bank Group itself has also taken an equity stake in four projects.

Alastair Campbell, Executive Vice President, Power & Infrastructure Finance at Standard Bank Group said: “Standard Bank will be ready to disburse funding for most of the projects as soon as all documentation is finalised and hedges are closed.”

Developers will have until 16 November 2012 to finalise all their documents and foreign currency hedges, after which projects can be rolled out.

“This confirms that there is considerable appetite from developers and banks to invest in renewable energy projects in South Africa. Standard Bank has been involved in the emerging story of power generation from inception. We participated in the Integrated Resource Planning public hearings which re-affirmed REIPP procurement process as an accepted way of diversifying our energy mix and reducing carbon emissions,” continued Campbell.

Further bidding rounds are expected to take place roughly six months apart from 2013 onwards to allocate the total 3725MW. In line with the country’s long-term power plan, South Africa aims to secure a total of 17,800MW of renewable energy or 42% of South Africa’s new generation capacity by 2030.

Standard Bank Group said it is already preparing for the financial close of the second bidding window and is supporting the third bidding window. The second bidding window is expected to close in the first quarter of 2013.

“We have already committed a total of R6.1 billion of debt out of a total R19 billion to preferred bidders on the second bidding window. The second programme is smaller than the first and will have a total of 19 projects. Standard Bank is supporting preferred bidders on five of these projects,” said Ntlai Mosiah, Head of Power and Infrastructure SA Advisory and Coverage at Standard Bank Group.

“As the programme unfolds, an increasing number of benefits are expected for the South African electricity consumer. Chief amongst these is the expected fall in tariffs bid due to increasing interest and competition in the process. We are expecting that renewable energy prices will reach grid parity in the foreseeable future.”

Mosiah continued: “An aligned major benefit will emerge from increased local component manufacturing with its associated industrial development and job creation, an aspect that government has insisted should be accelerated.”

South Africa loses billions to negligence and corruption


Los Angeles Times

October 15, 2011 |  5:00 am

REPORTING FROM JOHANNESBURG, SOUTH AFRICA — A South African government minister reportedly spends the equivalent of nearly $70,000 of taxpayer money on a trip to Switzerland to visit his girlfriend in jail (facing drug charges), then tells the president that he was on official business.

Now that was embarrassing. (He’s been on sick leave since February).

Then there was the minister and the police chief who were implicated in an unlawful deal to lease police buildings at inflated prices, which cost taxpayers more than $250 million.

But those incidents pale beside the sprawling, routine corruption and negligence in South African governance exposed by Willie Hofmeyr, head of an anti-corruption agency called the Special Investigating Unit. He told Parliament this week that around 20% of all government procurements, or about $3.8 billion, go missing each year — some of it stolen, the rest untraceable because of negligenceRead more.

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