UK-based independent power producer (IPP) Globeleq has completed the refinancing of the Soutpan solar power plant in South Africa. Located in the Limpopo province, the 31 MW solar photovoltaic facility is one of the first to be awarded under the SA Government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPP).
Globeleq has completed the senior debt restructuring of the solar plant to the worth of $71 million (ZAR 1.2 billion). The deal was led by the Standard Bank alongside the Soutpan solar project’s original leader, Vantage Green X Fund. Globeleq acquired a majority interest of 51% in the project in May 2019 and since then it manages the full scope of operations and maintenance of the plant.
The refinancing has lowered the cost of debt of the project, which in turn has allowed a significant reduction in the wholesale price of electricity produced by the PV plant. This will create a better capital structure enabling the release of funds for the project’s shareholders to reinvest in the power sector and also accelerate equity distributions to Soutpan’s community.
Mike Scholey, CEO of Globeleq, said the successful restructuring of the finance for the PV plant is an important transaction that will enable the state utility Eskom to save around $9.3 million (ZAR160 million) over the remaining 10 years of the agreement. The Soutpan plant is the fourth renewable project that Globeleq has restructured under the IPP Office Refinancing Protocol of the Department of Mineral Resources and Energy (DMRE), South Africa.
According to Sherrill Byrne, Executive Energy, and Infrastructure Finance at Standard Bank, the bank has been involved with Soutpan as Mandated Lead Arranger and Hedge Provider since the project started construction. The long-standing partnership with the project stakeholders demonstrates Standard Bank’s commitment to the renewable energy sector as well as its client relationships.
Alastair Campbell, Vantage GreenX’s Managing Director, mentioned that they have been a lender to the Soutpan project since 2013, playing a significant role in the evolution of the Sustainable Energy market in South Africa. The restructuring of the finance on the Soutpan project is indicative of a local green energy market that is well positioned to play an important in the quest to solve the country’s ongoing energy crisis.
