Globeleq, an Africa-focused power company, has completed a 1.2 billion rand (US$71 million) senior debt restructuring facility for a 31-megawatt solar power plant in South Africa’s Limpopo Province.
Soutpan is one of the first solar power plants built under country’s renewable energy independent power producer procurement programme.
Standard Bank led the refinancing of the debt alongside the project’s original lender, Vantage Green X Fund. Soutpan started operations in 2014, and Globeleq acquired a majority interest in the plant in 2019.
Since then, Globeleq has managed the full scope of its operations and maintenance. Standard Bank has been involved with Soutpan as mandated lead arranger and hedge provider since the construction of the plant started in 2012.
By lowering the cost of debt for the project, Globeleq says, the refinancing allows for a significant reduction in wholesale electricity prices from the plant, creates a more efficient capital structure that will enable the release of funds for shareholders to reinvest in the power sector, and accelerates equity distribution to Soutpan’s community and BEE (black economic empowerment) shareholders.
“The successful Soutpan restructuring is an important transaction which will save Eskom (Africa’s largest electricity public utility) more than 160 million rand over the remaining 10 years of the agreement,” notes Globeleq chief executive officer Mike Scholey.
Soutpan is the fourth renewable project that Globeleq has restructured under the Department of Mineral Resources and Energy’s IPP Office Refinancing Protocol.
"The restructuring of the finance on this project is indicative of a market that has matured, and which is well positioned to play an important and meaningful role in the quest to solve South Africa’s ongoing energy crisis,” says Vantage GreenX managing director Alastair Campbell.