Health chain improves their environmental fitness

Health chain improves their environmental fitness

South Africa’s landmark Renewable Energy Independent Power Producers Procurement Programme has not only helped change the power sector landscape of the country, but has also led to the emergence of the country’s largest bank as a leading investor in clean energy projects.

Standard Bank has financed 40% of the 1,760 MW renewable energy capacity operational in South Africa. All these projects were auctioned under the Renewable Energy Independent Power Producers Procurement Programme (REIPPP), and attracted interest from national as well leading international developers.

The bank has also financed an additional 800 MW capacity which is yet to be commissioned.

Four auctions under the REIPPP programme have seen allocation of 92 projects. However, the bank will still have the opportunity to expand its share in renewable energy lending further. Earlier this year, the Ministry of Energy announced that an additional 6,300 MW capacity would beauctioned under the REIPPP programme.

Some of the project developers successfully participating in the auctions include Scatec Solar, SunEdison, Acciona, Abengoa Solar, and Enel Green Power. Some of the major lenders to the selected projects are the African Development Bank, KfW, Norfund, the International Finance Corporation, Industrial Development Corporation, and the Development Bank of Southern Africa.

The auctions for REIPPPP are part of the Integrated Resource Plan 2010-2030 currently under implementation in South Africa. The initial plan under the REIPPPP was to offer just 3,725 MW, however the response of the developers has clearly been overwhelming.

The environmental and financial benefits of these projects have been enormous. A study by the Council for Scientific and Industrial Research (CSIR) stated that the 1.6 GW wind and solar power capacity operational through the REIPPPP at the end of December 2014 helped save more than $450 million. With the payments to these renewable energy projects through feed-in tariffs at around $390 million, the net ‘profit’ to the economy from these project is over $60 million.

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