Standard Bank, mandated lead arranger and underwriter, has successfully supported three new independent electricity generation projects signed into Government’s 2000MW Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), together with British International Investment. This, allows the bank to play a leading role in delivering renewable power to the grid and supporting South Africa’s drive to energy security.
Since the programme’s inception in 2020, when it was gazetted by the Minister of Mineral Resources and Energy to alleviate the country’s power constraints, the bank has supported clients, Scatec and H1 Holdings, bringing three projects valued at over R16 billion to fruition. These renewable solar and battery storage projects will each target 50MW of dispatchable generation capacity.
The projects are aligned to Standard Bank Group’s Environmental, Social and Governance (ESG) framework, which was captured in the launch of its Climate Policy in March of this year. In the policy, Standard Bank commits to achieving net-zero carbon emissions from its own operations for newly built facilities by 2030, for existing facilities by 2040, and in its portfolio of financed emissions by 2050.
Standard Bank Group will also mobilise a cumulative amount of between R250 billion and R300 billion for sustainable finance by the end of 2026. This target includes R50 billion of financing for renewable energy, and underwriting of a further R15 billion for renewable energy by the end of 2024.
“As a proudly African financial services provider and corporate citizen, we are deeply honoured to be able to contribute to the Government’s mission to bolster the supply of new generation capacity,” says Stephen Barnes, Global Head of Power and Infrastructure for Standard Bank Group. “This is not only about ensuring a reliable supply of power to citizens and a growing economy, but also in ensuring that we meet our obligations as a nation to reduce carbon emissions.”
“It is an especially significant responsibility for Standard Bank to be entrusted with financing these projects, delivering new generation capacity. Even as we assist the country’s developmental needs, we will continue to support our long-standing clients in ensuring that they meet their fiduciary and regulatory requirements to the highest standard,” Barnes says.
Given South Africa’s constrained supply within the context of ageing infrastructure combined with the continued need for maintenance and subsequent drive to increase electricity supply, we welcome this milestone as a step forward. With peak demand reaching winter highs there is a continued shortfall anticipated, and the country has set out ambitious targets to meet this demand, while also boosting the rollout of renewables through its Integrated Resource Plan and RMIPPP.
This RMIPPP is unique in that it allows for baseload power to be delivered to the grid. The clients that Standard Bank have supported, facilitate the further development of sustainable energy solutions for South Africa by combining renewable energy solutions with battery storage, reducing South Africa’s reliance on carbon-intensive coal and diesel power plants for dispatchable power. These will be one of the first of such projects financed in South Africa and the largest hybrid projects completed on the African continent.
“It is very exciting to not only witness but to be a part of significant competition and diversity in the South African power generation sector,” says Barnes. “We are confident that these additional projects will create the necessary momentum to shift the country’s reliance from carbon-based fuels towards sustainable energy, creating new green jobs and technical expertise in the sector.”
