RMB partners Sola Group to raise R2.8bn

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31-01-2024
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ITWeb
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Rand Merchant Bank (RMB) has partnered with independent power producer (IPP) Sola Group to raise a R2.8 billion debt and equity package.

The package, according to a statement, is for Sola Group’s 150MW multi-off take solar PV project near Virginia in the Free State.

The project is one of the first multi-buyer programmes in South Africa and is expected to reach commercial operations under numerous power purchase agreement in the middle of 2025, it notes.

Furthermore, the project is set to sell power to multiple independent customers and includes an unallocated portion that will be sold to multiple clients and electricity 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, adds: “This project is a first of its kind given the merchant market electricity trading strategy being implemented and led by experienced IPP, Sola. From a partnership and financing perspective, Sola reached out to RMB, and the respective teams formulated a highly structured and innovative financing solution straddling 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.