Rand Merchant Bank (RMB) has teamed up with independent power producer Sola Group to secure a R2.8 billion debt and equity package. According to a statement, the funds will be allocated to Sola Group’s 150MW multi-offtake solar PV project based near Virginia in the Free State.
This project is among the first multi-buyer programs in South Africa, and it’s expected to hit commercial operations under several power purchase agreements by mid-2025. Furthermore, the project aims to offer power to numerous independent clients. It also includes an unallotted portion that will be available for sale to several customers and electric power traders.
“This is the fourth utility-scale renewable wheeling project that Sola has closed and commenced construction on in the last 15 months. The project brings the group’s portfolio to 581 megawatts of wheeling capacity currently under construction,” says Katherine Persson, the head of Sola Assets.
Kwabena Malgas, head of infrastructure equity at RMB, highlighted the uniqueness of this project. He says, “This project stands out as the first-of-its-kind due to the merchant market electricity trading strategy being put into effect, with experienced IPP, Sola, at the helm. When it came to partnership and financing, Sola approached RMB, and the respective teams collaboratively developed a highly structured and innovative financing solution that encompasses both debt and equity.”
“The senior debt financing required flexible structuring whilst the equity and shareholder level financing allowed us to support and partner Sola with a bespoke funding package.”
The statement notes RMB acted as joint mandated lead arranger under the senior debt tranche and equity bridge loan, and supported UBuzwe Energy.
“The senior debt package for this transaction was particularly innovative, offering shorter-dated financing solutions which align with the dynamic short-term demand for green electricity in the sector. We are proud to be a part of this market-shaping transaction, and are pleased to begin what we believe will be a long-standing partnership with leading IPP, Sola,” concludes Sindisiwe Mosoeu, senior transactor in the infrastructure sector solutions team.
