Johannesburg, 25 January 2024 - The Development Bank of Southern Africa (DBSA) continues to position itself as one of the leading financiers in the energy sector in South Africa through its participation in the recently unveiled Independent Power Producer Programme (IPPPP). This initiative, led by the Department of Mineral Resources and Energy, introduces three dynamic procurement programmes under the broader umbrella of the Independent Power Producer Programme (IPPPP). The goal of the programmes is to secure 7615 MW of generation capacity, spanning across renewable energy, gas, and battery storage technologies.
Aligned with the Ministerial Determinations set forth in the 2019 Integrated Resource Plan (IRP2019), the three Bid Windows entail the procurement of the following:
- 5000 MW of renewable energy in the seventh round of the Renewable Energy IPP Procurement Programme (REIPPPP) Bid Window 7 (BW 7).
- 2000 MW from Gas to Power in the inaugural round of the Gas IPP Procurement Programme (GASIPPPP BW 1).
- 615 MW from the second round of the Battery Energy Storage IPP Procurement Programme (BESIPPPP BW 2).
The DBSA has played a pivotal role since the inception of the IPP Procurement Programme by transforming the energy landscape in South Africa. The Bank looks to support the development and funding of energy generation across different technologies and has successfully positioned itself as a leading investor in renewable energy projects.
“We have financed numerous IPPPP projects over the years, these include the Jasper Power Company solar PV project, the Jeffreys Bay wind farm, the Kaxu Solar One concentrated solar PV project and the recently committed Umoyilanga hybrid project. The Umoyilanga hybrid project aims to provide 75 MW of net dispatchable capacity from integrated wind, solar photovoltaic (PV) and battery storage systems. The concluded projects demonstrate the DBSA’s commitment to finding solutions to South Africa’s energy challenges”, says Mohan Vivekanandan, Group Executive: Client Coverage.
“In addition, our experience in gas-to-power energy generation in East, Central and West Africa, will allow us to support project developers in the inaugural gas-to-power procurement round”, added Vivekanandan.
Through the DBSA’s partnerships with the Department of Mineral Resources and Energy and the IPP Office, the Bank has contributed to increasing energy supply through committing approximately R18 billion across the IPPP bid rounds. This participation has culminated in debt and mezzanine funding across a wide range of technologies including solar photovoltaic (PV); concentrated solar power (CSP); wind, biomass and small hydro.
“We are excited about the recent programme announcements as the DBSA’s energy team has deep capabilities in this sector and will be looking to support the Independent Power Producer market including Black Economic Empowerment investors with the necessary infrastructure financing,” said Mathapelo Malao - Head of Energy, Environment, and ICT at DBSA.
Malao added “The experience and lessons that the Bank has cultivated since the inception of the REIPPPP have been invaluable. More importantly, the success of the REIPPPP has strengthened the DBSA’s position in the energy infrastructure landscape profiling the Bank as a leader in the energy sector.”
As a development finance institution, our purpose is to accelerate energy access and to ensure that we are able to unlock investment opportunities for previously disadvantaged communities. Through the bank’s developmental mandate, the DBSA’s capabilities as a financier are to provide funding through arranging and underwriting debt; providing project finance solutions predicated on sustainable cashflows; to provide Black Economic Empowerment funding; mezzanine debt; concessional funding with tenor extensions; blended finance as well as first loss instruments.
The IPP Procurement Programme has presented a renewed opportunity for the energy market in South Africa, and this will contribute significantly to the country’s energy generation capacity and in so doing help to alleviate the ongoing energy capacity constraints.
The first GASIPPPP Bid Window aims to procure 2 000 MW of new Generation Capacity, Ancillary Services and Energy Output to be produced from gas-fired power generation projects and this aligns to the country’s Integrated Resource Plan. The DBSA’s energy funding mandate also allows for financing of gas projects which should see more support towards emerging gas participants in the sector.
The DBSA’s involvement in the IPP Programme has highlighted the key role that a development finance institution can play in the energy ecosystem. This collaboration with the Department of Mineral Resource and Energy, National Treasury, and the Independent Power Producer (IPP) Office highlights the significant strides that the DBSA has made in promoting economic growth as well as regional integration in the African continent.
The DBSA is a leading Development Finance Institution (DFI), wholly owned by the government of South Africa. Established in 1983, the DBSA is mandated to promote economic growth and regional integration by mobilising financial and other resources from national and international private and public sectors for sustainable development projects and programmes in South Africa, SADC, and the wider African continent.
For more information visit www.dbsa.org. Email: firstname.lastname@example.org