Signage for the Development Bank of Southern Africa, Midrand. Picture: Karen Sandison, Independent Newspapers
THE DEVELOPMENT Bank of Southern Africa (DBSA) has committed funding to 36 projects in South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) valued at more than R17 billion.
The bank made the announcement at the first day of the Continental Energy Investment Forum Inward Buying and Investment Mission in Johannesburg on Monday.
The Inward Buying Mission is a forum designed to exchange energy-related information and expertise across African nations, and equip African energy leaders with the knowledge and resources they need to meet their respective energy needs and targets.
DBSA chief risk officer Mpho Kubelo said that although the bank invested in other infrastructure projects such as roads and ports, energy investment had become its key focus area.
As one of the leading financiers in Africa, the bank employs a proactive approach in procuring funds for infrastructure development projects in the energy sectors in South Africa, including for generation, transmission, and distribution.
This year, the Bank is heavily focused on leveraging funding from diverse investors to support energy infrastructure projects that align with the National Development Plan 2030 and the Sustainable Development Goals.
Kubelo said the DBSA had recognised that energy is critical in the industrialisation of any economy.
“The DBSA strategic approach is to provide guidance on financial instruments available for development finance projects on the continent,” Kubelo said.
DBSA offers financing for the development of energy technologies, energy generation, transmission and distribution projects.
Elliott Monama, the principal at the project preparation division at the DBSA, said the bank had the technical skills to help with project preparation so that ideas could be turned into bankable feasibility studies.
“Until a bank tells you it is bankable, only then can you say you have a bankable feasibility study,” Monama said.
The African Development Bank estimates that around $30–40bn per annum is required over the next six years for Africa’s energy infrastructure build in order to ensure universal access to electricity and to industrialise the continent.
According to the 2022 Africa Energy Outlook, about 600 million Africans, or 43% of the total population, lack access to electricity.
The South African electro-technical sector has an estimated annual turnover of $58bn and employs around 280,000 people and will be able to supply some of the components necessary for the Just Energy Transition (JET).
Earlier this year, the DBSA was appointed to act as a co-mandated lead arranger, along with Absa and Nedbank, to provide debt funding and BEE equity funding for three large-scale wind farms in the Eastern Cape.
The project will supply renewable energy of 330MW to Sasol and Air Liquide under a 20-year Power Purchase Agreement. The project capital expenditure will also include the construction of a transmission line of 120km.