ENERGY SERVICES 2020 MARKET INTELLIGENCE REPORT - GREENCAPE
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Energy Services 2020 Market Intelligence Report Energy Services: Market Intelligence Report 2020 i
GreenCape
GreenCape is a non-profit organisation that works at the interface of business,
government, and academia to identify and remove barriers to economically
viable green economy infrastructure solutions. Working in developing countries,
GreenCape catalyses the replication and large-scale uptake of these solutions
to enable each country and its citizens to prosper.
Acknowledgements
We thank Reshmi Muringathuparambil (lead author), Jack Radmore, Bruce Raw,
Mandisa Mkhize, Yaseen Salie, and Seraj Chilwan for the time and effort that
they have put into compiling this market intelligence report.
Disclaimer
While every attempt has been made to ensure that the information published in
this report is accurate, no responsibility is accepted for any loss or damage to
any person or entity relying on any of the information contained in this report.
Copyright © GreenCape 2020
This document may be downloaded at no charge from www.greencape.co.za.
All rights reserved.
Subscribe to receive e-mail alerts or GreenCape news, events, and publications
by registering as a member on our website: www.greencape.co.za
Cover image courtesy of G3 Energy
18 Roeland Street, Cape Town, 8001, South Africa
Editorial and review: Cilnette Pienaar, Jack Radmore. Lauren Basson
and Nicholas Fordyce
Images: City of Cape Town, GreenCape, G3 Energy, New Southern
Energy and Nicholas Fordyce
Layout and design: Tamlin Lockhart Art Direction
ii Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 iii
Contents List of figures Executive summary 1 Figure 1: What’s new? 3 Energy Services interlinked market segments 7 1. Introduction and purpose 5 Figure 2: 2. Sector overview 7 Energy Services sector overview 8 2.1. Market context 7 Figure 3: 2.2. Energy Services market drivers 8 Average Eskom tariff versus inflation (CPI) projected to 2022 9 2.2.1. Rising electricity costs 8 Figure 4: 2.2.2. Falling costs of renewable energy technologies 9 International levelised cost of electricity (LCOE) per renewable energy technology 2.2.3. Supportive energy policies and regulations by local and national government 11 and Eskom average tariff trajectory 2010 – 2018 (Rand/kWh) 10 2.2.4. Innovative finance facilitating the right type of finance into the sector 21 Figure 5: 2.3. Key players 26 Uptake of SSEG processes in municipalities 14 2.4. Energy Services market size 28 Figure 6: 2.4.1. Small-scale embedded generation – rooftop solar photovoltaic (PV) market size 28 PACE financing mechanism 22 2.4.2. Energy storage market size 29 Figure 7: 2.4.3. Energy efficiency market size 30 ES market value chain 26 3. Policy, legislation and governance 33 Figure 8: 3.1. Governance 33 Distribution of solar PV installations across end-user segments in South Africa 29 3.1.1. National government 33 Figure 9: 3.1.2. Local government 33 ESCos market for energy efficiency in South Africa 30 3.1.3. Industry bodies 33 Figure 10: 3.2. Legislation and regulation 33 2017 energy consumption in South Africa (TWh) 31 3.3. Policy and white papers 35 Figure 11: 4. Emerging opportunities, drivers and barriers 39 Policy-adjusted IRP 2019 allocations 37 4.1. Small-scale embedded generation 41 Figure 12: 4.1.1. Rooftop PV system bundling with standardised contracting models 41 Eight services are applicable in the South African energy storage context 44 4.1.2. Solar PV for energy resellers 42 Figure 13: 4.1.3. Operations and maintenance only contracts 43 Behind-the-meter energy storage cost trajectory per technology 2014-24 46 4.2. Energy storage 44 Figure 14: 4.2.1. Customer services 46 Number of energy efficiency projects by sector in South Africa 48 4.2.2. Distribution/ancillary services 47 Figure 15: 4.2.3. Utility services 47 Average capital cost of energy efficiency projects in South Africa 48 4.3. Energy efficiency 48 Figure 16: 4.3.1. ESCO Specialisation – modernisation of buildings for energy efficiency 49 GreenCape’s focus areas 58 5. Funding and incentives 51 5.1. General funding opportunities 51 5.1.1. Green Finance Database 51 5.1.2. Government funding and incentives database 51 5.1.3. FinFind database 51 5.1.4. AlliedCrowds database 51 6. The Western Cape: Africa’s growing greentech hub 53 7. GreenCape’s support to businesses and investors 57 8. References 61 iv Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 v
List of tables List of abbreviations
and acronyms
Table 1: AEEE Alliance for an Energy Efficient Economy
South African solar PV price 10 BEE Bureau of Energy Efficiency
Table 2: BTM Behind the meter
Increasing off-take agreement options – electricity wheeling and trading 12 Capex Capital expenditure
Table 3: CO2e Carbon Dioxide equivalent
Provincial breakdown of SSEG uptake 15 CCT City of Cape Town
Table 4: COTS Commercial Off-the-shelf
List of municipalities allowing SSEG to connect to the grid 16 C&I Commercial and industrial
Table 5: CMVP Certified measurement and verification personnel
Key objectives of the Eskom unbundling 17 CPI Consumer price index
Table 6: CSP Concentrated solar power
Key responsibilities of the new Transmissions Entity (Eskom Holdings) 18 DFI Development Finance Institution
Table 7: DoE Department of Energy (National)
Key responsibilities of the new Generation Entity (Eskom Holdings) 18 DMRE Department of Mineral Resources and Energy (National)
Table 8: DPE Department of Public Enterprises
The impact of the Eskom unbundling decision on the renewable energy industry 21 dti Department of Trade and Industry
Table 9: EE Energy efficiency
South African commercial banks on solar PV for C&I 24 EEMS Energy Efficient Monitoring System
Table 10: EG Embedded generation
Roles of key players in the ES value chain 27 EPC Engineering Procurement Construction
Table 11: EPCM Engineering Procurement Construction Management
Total energy savings opportunities and capital leveraged for small and large businesses ERA Electricity Regulation Act
identified by the PSEE programme 30 ES Energy services
Table 12: ESC Energy supply contracting
Emerging energy services opportunities 39 ESt Energy storage
Table 13: ESCo Energy services company
Barriers and drivers of the rooftop PV system bundling opportunity 41 GW Gigawatt
Table 14: GWh Gigawatt-hours
Barriers and drivers of the solar PV for energy resellers opportunity 43 HVAC Heating Ventilation and Cooling
Table 15: IEA International Energy Agency
Barriers and drivers of the operations and maintenance-only opportunity 44 IEP Integrated Energy Plan
Table 16: IFC International Finance Corporation
Barriers and drivers of the energy storage opportunity 48 IPP Independent Power Producer
Table 17: IRENA International Renewable Energy Agency
Barriers and drivers of the ESCO Specialisation opportunity 49 IRP Integrated Resource Plan
kW kilowatt
kWh kilowatt-hours
kWp kilowatt-peak
LCOE Levelised cost of electricity
MIR Market Intelligence Report
Mt Megatonnes
MW Megawatt
MWh Megawatt hours
MWp Megawatt peak
MYPD Multi-year price determination
NBI National Business Initiative
NCPC-SA National Cleaner Production Centre South Africa
NEES National Energy Efficiency Strategy
NERSA National Energy Regulator of South Africa
vi Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 vii
Executive summary
The term ‘energy services’ is used to describe three interrelated energy
market segments in the South African energy space, namely (1) small-scale
OEM Original equipment manufacturer embedded generation; (2) energy storage; and (3) energy efficiency. These market
PACE Property Assessed Clean Energy segments are increasingly bolstered by offerings in the energy finance sector,
PAYS® Pay As You Save® which present opportunities to financial investors.
PPA Power purchase agreement
PQRS Power quality and renewable services
PSEE Private sector energy efficiency
PV Photovoltaic There are four main factors driving growth in the ■ Solar PV for energy resellers. Property
RE Renewable energy energy services market: development owners (residential estates or
REIPPPP Renewable Energy Independent Power Producers Procurement Programme The above-inflation electricity price rises; shopping malls, for example) can install solar
SALGA South African Local Government Association decreasing technology costs; supportive policies, PV on their premises. They can benefit from
SANEDI South African National Energy Development Institute regulations and tariffs; and innovative finance bulk electricity discounted from municipalities,
SAPVIA South African Photovoltaic Industry Association options have all played an important role in and sell it to their tenants at the retail rate
SAWEA South African Wind Energy Association driving the growth of the energy services market. instead of the potentially less preferential
SME Small- and medium-sized enterprise individual unit tariffs.
SSEG Small-scale embedded generation The South African Energy Services market is well ■ Operations and maintenance-only contracts.
StatsSA Statistics South Africa established and growing: This opportunity is two-fold. It serves to
TWh TerraWatt-hour The national embedded generation market for create entrance to market for foreign
installations, operation and maintenance of engineering, procurement and construction
rooftop solar PV has grown in the last two years. companies (EPCs) or investors; and invites
It is expected that the total annual available smaller EPCs and energy services companies
market could grow to a saturation point of ~500 (ESCos) to specialise and take over contracts
Exchange rate used MWp installed per year on an ongoing basis. This
market could reach a total of 7.5 GW of installed
capacity by 2035 – a total available market of
at renewal periods.
Within the energy storage market, there is an
1 US Dollar = R14.38 (December 2018) R75 billion. The installation of an additional 500 emerging opportunity for investors:
MWp in one year translates to the potential ■ Behind-the-meter battery storage. There are
creation of ~1 250 jobs. With increasing demand in eight storage applications most likely to gain
embedded generation, the SA energy storage traction in South Africa before 2035.
market is also expected to grow, and to be valued Applications for solar PV self-consumption
at ~R5 billion by 2035. It is important to note that and backup power represent the behind-the-
in the early stages of this market, the best meter opportunities for high-end customers.
business case is in larger scale applications such Increased resource adequacy, grid
as grid management and resource adequacy management (voltage and frequency), and
applications. It is estimated that this market will capital expense deferral are some of the
reach R15 to 30 billion by 2030. The energy opportunities for distribution utilities.
storage market is expected to become the
keystone of the future energy services market. Within the energy efficiency market, there is an
Energy efficiency presents an opportunity to emerging opportunity for investors:
investors and businesses. The estimated market ■ Energy efficiency as a service. Growth and
by 2035 is R21 billion. development of the ESCO market.
■ Modernisation. The retrofitting of South
Within embedded generation, there are three Africa’s large stock of existing buildings is
emerging opportunities for investors: expected to become the largest sector within
■ Rooftop PV system bundling with the green building industry by 2020. This
standardised contracting models. This opportunity is for ESCos specialising in
opportunity involves aggregating smaller energy-efficiency measures like lighting,
rooftop solar PV projects to reach a scale HVAC, and smart metering.
where they become attractive to larger
investors by reducing transaction costs and
spreading the risk across the new portfolio.
viii Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 1
Summary of market opportunities
Requirement Expected
Opportunity Key drivers Macro environment
& barrier timeframe
Rooftop PV ■ Economies of scale ■ Standardised PPAs 10 years ■ The lack of available, affordable
system helps ■ Differential between finance for smaller projects
bundling with ■ Shift in average and feed-in and ■ Smaller clients are not attractive
standardised minimum size of self-consumed energy to larger EPCs, so they sometimes
PPAs projects tendered for ■ Regulatory certainty ask them to wait until they have a
across market (small-scale few similarly sized clients
■ ESCos can attract embedded ■ Smaller rooftop PV projects are
What’s new?
investors generation) bundled together to reach a scale
■ Property assessed where they become attractive to
clean energy (PACE) / larger investors who, up until now,
power purchase have only been interested in
agreements (PPAs): utility-scale RE projects
better pricing
PV for energy ■ Electricity tariffs ■ Regulatory certainty 5-10 years ■ 1-2 property tenders per month This MIR provides an update on the opportunities, barriers, and regulations
resellers ■ Energy security ■ Standardised PPAs nationally in the last year – green discussed in the 2019 Energy Services MIR. It also outlines emerging opportunities
■ PACE/PPA ■ Home-owners building industry is on the rise
■ Wheeling association approval ■ Eskom and municipal electricity and barriers in small-scale embedded generation and energy efficiency.
■ Carbon footprint tariffs on the rise
■ Continuous revenue
stream
Operations Renewal of O&M Option in contracts to 1-5 years Shoddy workmanship due to
■ ■ ■
What happened in 2019 ■ Gwede Mantashe was appointed as the
and contracts after 2-5 change O&M provider cut-throat competition resulted in ■ The Integrated Resource Plan (IRP) 20191 was Minister for Mineral Resources and Energy in
maintenance years (project ■ Only for cash or poorly installed systems
(O&M): taking dependent) bank-financed ■ As these clients start exploring
gazetted in October 2019. The updated May 2019.
over contracts ■ Specialisation of EPCs projects (not PPA) better EPCs for new projects, they document allocates 500 MW per annum for
or O&M only ■ Enables foreign project sometimes request takeovers of distributed generation for own use of between ■ In October 2019, the Department of Public
developers and older projects for O&M component 1 MW and 10 MW, starting in 2020. Enterprises (DPE) announced the official plan
investors to have a ■ ESCos/EPCs are starting to
for the unbundling of Eskom into three
footprint in South specialise, focusing on niche
Africa without a services as part of the wider
■ In February 2019, Parliament passed the separate entities – generation, transmission,
dedicated labour force value chain long-awaited Carbon Tax Bill, with the first and distribution – by 2021.
■ Entrance to market: foreign EPCs phase of the programme to be implemented
trying to get footprint in SA but
from 2019 to 2022. The tax rate will be set at ■ Rolling blackouts (load shedding) continue as
without a local office can partner
post installation with local EPCs
R120 per tonne of carbon dioxide equivalent Eskom is unable to match current demand
to continue doing O&M in the (CO2e) produced, and the total tax free with available supply.
foreign EPC’s name, and carry allowances can be up to 95%.
their brand; at the same time This MIR updates the 2019 report and highlights
creating local employment
■ Schedule 2 of the Electricity Regulation Act 4 the following:
Battery ■ Load-shedding ■ Battery pricing still 15 years ■ Load-shedding and security of 2006 was amended on 10 November 2017. ■ updates on the state of the small-scale
storage (BTM) ■ Backup power demand high for the need of supply are major concerns. It exempts certain power generation facilities embedded generation in South Africa;
– 1.5 GWh Battery pricing Battery specific PPA / Battery storage prices are
■ ■ ■
of less than 1 MW in size from having a ■ updates on the state of energy efficiency in
■ Increase in renewable financing / lease dropping fast.
generation licence. If an installation meets South Africa;
energy (RE) ■ Electric mobility is gaining
■ Electric mobility momentum the criteria as stipulated in the amended ■ the opportunities for players within the Energy
schedule, the installation can be registered Services market;
Energy 1-5 years
■ Legislative and ■ Smaller project sizes ■ New buildings only make up ~5% with NERSA, instead of requiring a licence. ■ Energy Services market drivers and barriers;
efficiency as a regulatory changes ■ Economic downturn of total buildings in South Africa
service &
It is expected that the distribution operators, ■ the Eskom utility unbundling plan and its
■ Rising energy prices Retrofitting of existing buildings is
modernisation ■ Falling cost of expected to become the largest
i.e. municipalities or Eskom, would be in impact on the energy services market; and
energy-efficient sector within the green building charge of registering the installations and ■ the influence of the 2019 IRP on future
technologies industry by 2020 report to NERSA. opportunities.
1
The Integrated Resource Plan is a national government document that aims to provide a clear indication of South Africa’s electricity
demand, how this demand will be supplied, and at what cost.
2 Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 3
1
Introduction and purpose
In response to changing demands, energy service providers are
broadening their market offerings. The South African energy services
market holds opportunities for equipment suppliers, project developers,
technical advisors, and financial investors.
The need to improve energy efficiency in
buildings due to carbon and energy security
goals, and to reduce energy costs, has created a The value of the global Energy
demand for energy efficiency and energy service Services market grew by 8% to USD
providers. Over the years the concept of energy 33.17 billion in 2019, up from USD 28.6
services and energy services companies (ESCos) billion in 2017. Despite differences
has evolved and matured in several markets
across countries and regions,
around the world, including South Africa.
projects are generating energy and
This market intelligence report provides potential financial savings upwards of 25%. The
investors in the embedded generation, energy global energy services market has
storage, and energy efficiency markets with a shown the ability to impact projects
greater understanding of market opportunities in
in buildings, industry, and transport
South Africa, taking into account the size of the
opportunities, the level of risk involved, and
in both the private and public sectors
current barriers. around the world (AEEE & BEE 2019).
The report is compiled for foreign direct and local
investors (persons or organisations) that are
looking to invest directly in the South African ■ This is followed by an overview and update
green economy through project development, of policies, legislation, and governance
asset management, equity, debt, equipment (Section 3) that guide and affect the energy
manufacture, or support services. services (ES) market.
■ In Section 4, emerging opportunities and their
In what follows: related drivers and barriers are highlighted,
followed by sections that outline various
■The sector overview (Section 2) provides a finance and investment incentives (Section 5),
national and provincial economic overview of present the case for the Western Cape as a
the energy services market, including: potential greentech hub for Africa (Section 6),
■ the market context (small-scale and explain GreenCape’s work within the
embedded generation, energy storage, green economy (Section 7).
and energy efficiency);
■ four major market drivers in the South For questions, queries, or to access GreenCape’s
African energy services market; services, contact the energy services team at:
■ market sizing (small-scale embedded energy@greencape.co.za.
generation, energy storage, and
energy efficiency); and
■ key players in the South African energy
services market.
© New Southern Energy
4 Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 5
2
Sector overview
Rising electricity prices, dropping technology costs, supportive
energy policies and incentives are prompting consumers to explore
alternative energy options, driving the growth of the energy services
(ES) market in South Africa and creating a thriving value chain.
This section provides an overview of the national African energy space, namely small-scale
and provincial (Western Cape) energy services embedded generation, which is currently
(ES) context, covering market developments, key dominated by rooftop solar photovoltaic (PV)
industry players, and the size of the market. The systems, energy storage, and energy efficiency.
term ‘energy services’ is used to describe three Figure 1 below breaks down the three interlinked
interlinked energy market segments in the South energy market segments.
■ Generation ■ Energy storage ■ Implementation of
facilities of less systems are behaviour change
Small-scale embedded generation
than 1MW. technologies in or technology to
■ Located at which electric reduce energy
residential, energy is loaded consumption,
Energy efficiency
commercial or and, when while producing
Energy storage
industrial sites, needed, discharged the same or
where electricity is into the network. greater outputs.
generally also
consumed.
■ Installed on the
customer’s side
of the electricity
meter.
Figure 1: Energy Services interlinked market segments
2.1. Market context
The South African electricity mix is primarily The South African electricity market is currently
made up of coal assets, because of limited managed on a single operator model by the
technology options in the past, and South Africa’s state-owned entity, Eskom, which is responsible
abundant supply of coal. According to the for generation and transmission, and which also
national electricity utility, Eskom, South Africa controls a minority share of the distribution
produces approximately 224 million tonnes of market. This single operator model is designed to
coal annually, making it the fifth largest country- support developing electricity markets in need of
level producer of coal in the world. In 2020 South structured long-term infrastructure investments
Africa’s nominal generation capacity is (with 10 – 15-year construction timelines), and
dominated by coal-fired generation stations with diverse demand balancing of centralised
a net output of 38.2 GW. This represents more generation facilities.
than 90% of the country’s total installed capacity
© New Southern Energy of over 45 GW (Department of Energy 2018).
6 Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 7
South Africa’s dependence on this single electricity supply has also led to increased 800
operator model has decreased over the past 10 demand efficiencies (energy efficiency).
years with the introduction of new technologies,
700
which are cheaper, capable of being The sections that follow detail the market context
decentralised, and more low-carbon. The growth (small-scale embedded generation, energy
of this decentralised market is evidenced by storage, and energy efficiency), four major market 600
the evolution of the small-scale embedded drivers in the South African energy services
Normalised index
generation and energy storage markets. market, and key players in the South African
(2003 = 100)
500
Continual increases in the cost of traditional energy services market, as shown in Figure 2 below.
400
Energy
services 300
200
Small-scale embedded Energy 100
generation (SSEG) efficiency
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Year
Rooftop solar PV Energy storage Inflation (CPI) Eskom tarriff
Section 4.3.1. Figure 3: Average Eskom tariff versus inflation (CPI) projected to 2022
Section 4.1.1. Section 4.2. Modernisation Sources: Statistics South Africa (StatsSA) and Eskom (2019)
Rooftop PV Behind-the-meter of buildings
Section 4.1.2.
system bundling battery storage
Solar PV for
energy resellers
The National Energy Regulator of South Africa 2.2.2. Falling costs of renewable energy
(NERSA) approved Eskom tariff increases of: technologies
Section 2.2. and Section 4.1.3. ■ 9.41% in 2020 Renewable energy technology prices have been
Drivers: Electricity price, renewable energy price, ■ 8.1% in 2021 dropping steadily since 2010. Figure 4 shows the
supportive regulations (wheeling; SSEG) and tariffs ■ 5.2% in 2022 average international levelised cost of electricity
and innovative finance. (LCOE) per renewable energy technology, and the
This is in addition to the 4.41% tariff increase average Eskom tariff in 2010 and 2018. For
which was approved by NERSA in 2018 through example, the global average price for solar PV in
Section 2.2.4. Eskom’s Regulatory Clearing Account (RCA) 2018 was R1.22 kWh, down from R5.33 kWh in 2010
Driver: Innovative energy finance recovery for the 2015 to 2017 financial years. The (IRENA 2019), a ~77% drop in eight years. The most
purpose of an RCA approval is to allow Eskom significant decreases in average cost have been
to retrieve justifiable costs retrospectively by in solar PV and wind technologies.
Figure 2: Energy Services sector overview adding them to future years’ tariffs. The approved
increases are significantly less than the
applications by Eskom for yearly tariff increases
2.2. Energy Services In turn, these developments, discussed in more of 17.1%; 15.4% and 15.5% for the next three years.
market drivers detail below, create significant opportunities for
Four major developments are transforming South energy services investors and businesses, in The average standard Eskom tariffs have risen
Africa’s energy market from a monopoly model to particular equipment suppliers, project by almost 300% since 2007. Historical data from
a distributed generation model made up of developers, technical advisors, installers, and both Eskom (2019) and StatsSA (2019), shown in
multiple smaller generators, buyers, and sellers: financial investors. Figure 3, reveal that while inflation has almost
■ rising energy prices; doubled since 2009, Eskom prices have tripled
■ falling costs of renewable energy technologies 2.2.1. Rising electricity costs over the same period.
such as rooftop solar PV; Rapidly rising Eskom electricity prices have
■ supportive energy policies and regulations by created a sizeable demand for viable alternative
local and national government; e.g. energy sources. Figure 3 compares Eskom price
■ Integrated Resource Plan 2019 increases to the more conservative increase in
■ Eskom unbundling plan 2019-2021 South Africa’s inflation rate (as reflected by the
■ innovative energy financing programmes Consumer Price Index).
and incentives.
8 Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 9
2.2.3. Supportive energy policies and Three major changes are taking place on the
regulations by local and national local government level:
5.5 government
5.33
The regulatory environment has a direct impact 1. Metropolitan municipalities around the
5
on investment opportunities, market growth, and country, specifically City of Cape Town,
job creation. To lower demand on the national Tshwane, City Power (Johannesburg) and
4.5
grid, and to reduce carbon emissions, national Nelson Mandela Bay Municipality, are
4
government has put in place several energy challenging the ‘single-buyer’ model, which
policies and incentives to encourage energy restricts the purchase and sale of electricity to
3.5 efficiency interventions and alternative energy Eskom. These municipalities intend to
generation. Section 3 (legislation, regulation, and purchase electricity directly from independent
Rands/kWh
3 policy) and Section 5 (funding opportunities and power producers (IPPs) and on-sell this
incentives) discuss these in more detail. electricity to their customers3.
2.5
2.29 Local government commitment to providing 2. Increasing off-take agreement options for
2
policy certainty local embedded electricity generators.
1.83
Regulatory developments as described in Section 3 Electricity wheeling, as allowed by the DMRE
1.5
facilitate the growing uptake of renewable energy and implemented by local municipalities, will
1.22
1 options, particularly in the 500 kWp R 9 500 – R 13 000 R 0.80 – R 1.10
As these costs drop across a variety of energy services (ES) technologies, the financial case for
investment into ES interventions improves.
© GreenCape
3
There is currently a court case to determine if it is within a municipality’s mandate to undertake this role. Further analysis will be
included once a ruling has been made.
2 4
Exchange rate: 1 US Dollar = R14.38 (December 2018) One licence has been allocated to PowerX, but the process by which more licences can be allocated is yet to be finalised.
10 Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 115
Table 2: Increasing off-take agreement options – electricity wheeling and trading 3. Country-wide rollout of national small-scale installations on their electricity grids, having an
embedded generation rules, regulations, and application process for customers, and having a
Electricity wheeling Electricity trading tariffs to promote the safe and legal uptake of NERSA-approved tariff). By October 2018, ~41
SSEG for own use6. municipalities in South Africa have published
The wheeling of energy is an exciting driver for the The release of a licence allowing private sector
SSEG regulations7, including all eight
uptake of energy services, specifically SSEG, in energy trading has opened the market to private
Table 3 represents the best level of information metropolitan municipalities. Twenty-five of these
South Africa. Wheeling is the transportation of sector power purchase agreements, and on-sales
obtained by the South African Local Government municipalities also have NERSA-approved SSEG
electrical energy from a generator to a separate to private consumers using the national and local
Association (SALGA) on the uptake of SSEG tariffs for one or more customer groups. They
electrical load, by making use of municipal or distribution networks. There is currently only one
processes in municipalities by October 2018. represent approximately 15% of all the
Eskom grid infrastructure and power purchase company (PowerX) that has a confirmed national
Figure 7 shows the upward trend of municipalities municipalities that have electricity
agreements (PPAs). The municipality/Eskom energy trading licence. The process by which
adopting SSEG processes (i.e. allowing distribution licences8.
operates in an administrative role to facilitate the further licences will be granted is unclear at
transaction between the generators of clean power, this stage.
and electricity users interested in buying electricity
from renewable energy sources. Wheeling has Much the same as wheeling, electricity trading is
gained traction in City of Tshwane, Nelson Mandela the transportation of electrical energy from a
Bay Metropolitan Municipality and the City of Cape generator to a separate electrical load, by making
Town over the past year. It is expected that similar use of municipal or Eskom grid infrastructure and
frameworks will be adopted across the country power purchase agreements (PPAs). The difference
by 2025. is that a private sector electricity trader or third
party will purchase the electricity, pay the local
The adoption of wheeling frameworks around the municipality/Eskom to wheel it over their network,
country provides SSEG investors with alternative and sell it to a willing customer. The municipality/
offtake agreements and improved potential Eskom operates in an administrative role to
returns. It creates new business cases as the facilitate the transactions, and takes a fee for
opportunity sizing is determined by the this service.
consumption profile of the off-take, and not the
generation technology, as it is not limited to the This represents both an opportunity for investors in
user’s site, or roof space in the case of PV. the SSEG market to increase their off-take
agreements and reduce their risk profile, and an
It will present an opportunity for the following opportunity for investors interested in investing in
cases: other electricity trading entities.
■ medium-voltage C&I sector companies with large
energy bills that warrant it;
■ buildings that currently are not able to install
PV on their rooftop, such as:
■ new buildings lacking adequate structural/
wind buffer;
■ buildings with asbestos roofs that cannot be
tampered with, which currently make up a
significant portion of older building stock; and
■ tenants who do not own the buildings and
will struggle to have any structural
changes approved.
In addition to enabling renewable energy
technologies, this business model would provide a
platform for municipalities to engage and retain
customers. Through offering an additional avenue
to prosumers5, municipalities would propose a new © City of Cape Town
service to electricity generators as well as
consumers interested in procuring clean energy.
5
A prosumer is an entity or person who produces and consumes a product, in this case electricity.
This represents both an opportunity for investors in 6
The generation of electricity on the load site where it will also be consumed.
the SSEG market to increase their off-take 7
Municipalities publish these regulations on their individual websites to detail the application process for safe and legal installation of
agreements and reduce their risk profile. SSEG systems within the municipal electricity grid.
8
To see a list of municipalities that allow SSEG, please visit the SALGA website – Status of SSEG in SA: https://www.sseg.org.za/sta-
tus-of-small-scale-embedded-generation-sseg-in-south-african-municipalities/
12 Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 1345
41 Table 3 gives a provincial breakdown of municipalities that have SSEG processes.
40
Table 3: Provincial breakdown of SSEG uptake
34
35
Number of
Number of
Number of Municipalities
30 Number of municipalities Number of
29 municipal
municipalities with an official municipalities
25 Province electricity
25 allowing SSEG SSEG with SSEG
25 distributors in
21 installations application tariffs
the province
20 system
17
18 Eastern Cape 22 4 3 2
15
10
Free State 17 1 1 2
10 12
Gauteng 9 4 3 2
5
5
KwaZulu-Natal 25 1 1 1
3
0 Limpopo 16 3 1 1
Feb – 2016 Nov – 2016 Oct – 2017 Oct – 2018
Mpumalanga 14 2 1 0
Allowing SSEG installations With offcial application system With SSEG tariffs
Northern Cape 24 3 1 0
Figure 5: Uptake of SSEG processes in municipalities North West 13 1 1 0
Source: SALGA 2018
Western Cape 25 22 17 17
TOTAL 165 41 29 25
Percentages of
– 25% 18% 15%
licensees
Under – – 9 6
development
Source: SALGA 2018
9
Table 4, overleaf, gives a more detailed overview of the municipalities that allow SSEG installations
within their municipalities, either on a case-by-case basis or through an application process.
© G3 Energy 9
The number of municipal electricity distributors in each province is an estimate by SALGA, based on the 165 distribution licences issued
to municipalities by NERSA and the municipal mergers that have occurred over time.
14 Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 15Table 4: List of municipalities allowing SSEG to connect to the grid These changes at municipal level complement Since 2010/11, there have been several draft
legislative updates on a national level, e.g. the revisions of the IRP that have been distributed
Province Municipality Province Municipality gazetted Integrated Resource Plan 2019 and for public comment. In 2018, the latest IRP was
Buffalo City Metropolitan Beaufort West Local future changes such as the unbundling of the released for public comment. In October 2019
Municipality Municipality national utility, Eskom. Together these changes the final IRP 2019 was gazetted with the aim to
herald a freer, more ‘liberalised’ electricity provide policy certainty to the market. The
Bergrivier Municipality market, in which all stakeholders are empowered 2019 IRP is detailed in Section 3.3.
in their energy choices.
Kouga Local Municipality Breede Valley Local
Eastern Cape Unbundling the national electricity utility (Eskom)
Municipality
National Government - 2019 Integrated Resource The South African government has decided to
Nelson Mandela Bay Cape Agulhas Local Plan (IRP 2019) unbundle the national electricity utility (Eskom)
Municipality Municipality The Integrated Resource Plan is a national into three subsidiaries, namely Eskom Generation
government document that aims to provide a (generation entity), Eskom Transmission
Makana Local Municipality City of Cape Town
clear indication of South Africa’s electricity (transmission entity) and Eskom Distribution
Mangaung Metropolitan Cederberg Municipality demand and how this demand will be supplied, (distribution entity). The aim of this new business
Municipality and at what cost. model is to improve the power utility through
Free State Drakenstein greater transparency and accountability, and to
Municipality In May 2011 the then Department of Energy (now allow stakeholders a more efficient approach to
City of Johannesburg George Local Department of Mineral Resources and Energy) address generation, transmission and
Municipality released the Integrated Resource Plan 2010-2030 distribution challenges separately. The process of
(IRP 2010) in respect of South Africa’s forecast unbundling will take place over several years
City of Tshwane Hessequa Local energy demand for the 20-year period from 2010 (2019 – 2022). It will ensure that the generation
Municipality to 2030. The IRP 2010 was intended to be a ‘living capacity runs uninterrupted, and that South
Gauteng
plan’ that would be reviewed by key stakeholders Africans will receive un-interrupted electricity.
Ekurhuleni Metropolitan Kannaland Municipality
at least every two years. However, this was never The Department of Public Enterprises office
Municipality
Knysna Municipality done and resulted in an energy mix that failed to outlines the plan through a myriad of objectives,
Western Cape adequately meet the constantly changing supply with key objectives listed below in Table 5.
Midvaal Local Municipality Laingsburg Municipality
and demand scenarios in South Africa.
KwaZulu-Natal Ethekwini Municipality Langeberg Municipality
Ephraim Mogale Local Mossel Bay Municipality Table 5: Key objectives of the Eskom unbundling
Municipality
Oudtshoorn
Reduce reliance on coal to other cleaner and cheaper energy sources indicated in
Municipality 1
the IRP 2019
Limpopo
Polokwane Municipality Overstrand Municipality
Create three separately managed and operated subsidiaries: Generation,
2
Mogalakwena Local Prince Albert Local Transmission and Distribution
Municipality Municipality Key
Optimisation of the operations and governance competency (including climate
Objectives 3
Govan Mbeki Municipality Saldanha Bay change impact)
Municipality
4 Implementation of cost-effective business practices for each entity
Mpumalanga
Steve Tshwete Local Stellenbosch
Maintain the livelihood of the workers, and communities located and economically
Municipality Municipality 5
dependent on coal mines
Dawid Kruiper Municipality Swartland Municipality
Gamagara Local Municipality Theewaterskloof Local Transmission Entity (TE): systems and market Entity (TE) will become the buyer for purposes
Northern Cape
Municipality operator. In the immediate future, the creation of of the power purchase agreements (PPAs)
Sol Plaatje Municipality Witzenburg the transmission entity is a priority as it is the entered into with generators. All existing PPAs
Municipality keystone in Eskom's reform. This entity will be between Eskom and various IPPs will have to
North West City of Matlosana wholly owned by Eskom Holdings and its core be transferred to the TE. The TE will continue
Source: SALGA 2018 functions will be to act as an unbiased electricity to own and develop key infrastructure such as
market broker, to promote capital investment substations, transformers, and ~33 000
There is a large range of SSEG tariffs across the municipalities listed in Table 4. While the average tariff within the industry, and to catalyse energy kilometres of transmission lines. The key
remains low, there is still a string of business cases to be made, built on the value of self-consumed efficiency and cost sustainability. Once responsibilities of the TE are detailed in
electricity. There is currently no guarantee on the structure and cost of municipal consumption and restructuring is complete, the Transmission Table 6 overleaf.
feed in tariffs from year to year. Municipalities are moving tariffs to be more cost reflective, with the bulk
of their costs coming in the form of energy time of use purchases from Eskom.
16 Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 17Table 6: Key responsibilities of the new Transmissions Entity (Eskom Holdings)
1 System and market operator
2 Manage the electricity selling function across all stakeholders
Key
3 Facilitate electricity selling function through open market model
responsibilities
4 Dispatch the generators according to least-cost merit order
5 Balance electricity supply and demand in real time
Generation Entity. The Generation Entity (GE) is responsible solely for generation. The current power
plant base will be separated into a number of feasible smaller generation units with the intention that,
over time, the generation market will become more competitive and decentralised (including renewable
energy generators).
All Eskom-owned power plants will be housed in this entity. The entity will contract with the
Transmission Entity for the right to sell electricity and use the grid in the same way as IPPs currently
do. This would create a level of competition in the industry between private generators and the new
generation entity. The key responsibilities of the GE are detailed in Table 7 below.
Table 7: Key responsibilities of the new Generation Entity (Eskom Holdings)
1 Maintain and improve current generation assets
2 Develop new price-competitive generation assets
Key
responsibilities
3 Reduction of the price and cost of coal while maintaining the quality of coal
4 Reduce emissions through discovery and use of cleaner coal processes
Distribution Entity. The Distribution Entity (DE) will contributes directly to South Africa’s
be authorised to buy from the Transmission Entity, deteriorating investment grade. Eskom has
licensed municipal generators, and embedded failed to finance its own borrowings, even with a
generation. The roadmap states that further more than 500% tariff increase, over the recent
consideration will be given to the structure of the years. In order to pave the way out of this debt
distribution sector as a whole, and that the crisis, the Minister of Finance tabled a Special
appropriate policy structures need to be Appropriation Bill that will allocate a further R26
developed. This is a fundamental shift towards an billion in 2019/20 and R30 billion more in 2020/21,
open and competitive market, and should be on top of the R350 billion guarantee.
welcomed by the private sector. The wheeling
framework, such as the one co-designed by The implications of Eskom’s reform plan
GreenCape for the City of Cape Town, can be a to the RE sector in South Africa
viable tool that ensures these local municipalities While Eskom undergoes this massive
are adequately supported to generate revenue transformation, the energy services industry,
and provide electricity to their communities. particularly SSEG, is expected to gradually gain
more access to the market through enabling
Eskom’s financial sustainability regulatory determinations from NERSA, DMRE
Eskom’s unsustainable debt status, including its and all other regulatory bodies. Table 8 details
failure to service even the interest payments on the impact of the Eskom unbundling decision
this debt, is the single biggest risk to Eskom and on the renewable energy industry.
© GreenCape
18 Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 19Table 8: The impact of the Eskom unbundling decision on the renewable energy industry
Eskom unbundling Industry impact
decision
The renewable energy (RE) industry requires consistent and sufficient
procurement rounds to achieve sizeable growth that has the potential to boost
the local manufacturing industry, local content, create jobs, etc. A separately
managed “transmission” unit and intra-company competition will drive the
market, increase the willingness of lenders to explore favourable financing
The Transmission Entity rates (locally and internationally), and drive insurance premiums down due to
will be the buyer the reduced risk factor currently linked to Eskom. The transmission entity (TE)
will play a major role in enabling competition in the market, as this will allow
the RE industry to attain and maintain a sustainable growth rate that has
previously been hindered by the politically influenced delays. This may also
support the growth of the small-scale embedded generation and distributed
generation markets, as the TE seeks cheaper generation sources.
Open market model and The TE should stimulate the market through an open-market model that allows
intra-company open access to the national and local electricity grids.
electricity trading
It remains unclear how the Eskom debt issue will be resolved. Most likely it will
be transferred to National Treasury. Uncertainty will continue to affect
Eskom finance crisis international investors' perception of South Africa’s REI4P programme.
However, the TE establishment will hopefully stimulate the industry over a
short-term period and offer risk-adjusted returns for the investors.
2.2.4. Innovative finance facilitating the ■ It provides long financing terms of up to 20
right type of finance into the sector years, which makes it especially viable for the
The growth of the South African energy services commercial sector.
market is aided by ‘green’ energy finance ■ It can be combined with municipal and
offerings that facilitate the tailored finance government incentive programmes.
solutions for the energy sector. A number of ■ The installed system is permanently affixed
exciting finance mechanisms are being tested in to a property.
the market. Three of these are outlined below. ■ It can be repaid through the “special
assessment” on the rates account and
Property assessed clean energy (PACE) collected by the municipality of the PACE entity.
According to PACENation10, PACE is a financing
mechanism that enables low-cost, long-term As explained in Figure 6, the PACE entity provides
funding for energy efficiency, renewable energy, financing to the energy services company or
and water conservation (resource efficiency) installers who want to install resource-efficient
projects installed by ESCos on properties where technology on a property. Once the project's
rates are collected by the municipalities instead feasibility has been assessed by the PACE entity,
of by Eskom. the project is then financed by the PACE entity.
There are a few key elements of a successful Municipalities perform rate collection services for
PACE programme: a small administration fee, which includes a
‘special rate/tax’ on the property’s rates bill. This
■ It is voluntary for all parties involved. is used to re-pay the PACE entity for financing
■ It can cover 100% of a project’s hard the installation. This ‘special assessment’ is linked
and soft costs.11 to the property (irrespective of its owner).
10
https://pacenation.us/ – A movement of people and organisations who are joined in their support for PACE financing
11
Hard costs are infrastructure construction costs. Soft costs are all other costs that are not directly related to infrastructure and
© Solar MD construction costs, such as services, legal, and administration costs.
20 Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 21If there is a default on payments, the municipality Future potential owners must agree to the ‘special Property owners have reacted favourably to However, in 2017, the big five banks in South
responds in much the same way as when other rate' on the rates bill and agree to continue to pay PACE internationally because external investors Africa started to focus on rooftop solar PV’s
rates are overdue. The current or future owner will this before they may own the building. can fund projects so that there are no out-of- unique financing needs, providing more targeted,
be liable to pay the overdue amount. The building pocket costs for the property owners. Since PACE patient, and affordable finance packages for
owners are only liable to pay the special rates for PACE is an international initiative; however, local financing terms extend to 20 years, it is possible commercial and residential solar PV. The
as long as they are the owners. However, they programmes are being explored and tailored to to undertake deep, comprehensive retrofits that inclusion of the commercial banking sector may
must meet the criteria set out by the PACE entity meet regional market needs. Regardless of the have meaningful energy savings and a significant reduce some opportunities for less traditional
when they first approach or are approached by model, there are several items that hold true for impact on the bottom line. The annual energy investors such as equity funds; however, it could
the ESCo that installs the service. every PACE programme. savings for a PACE project usually exceeds the unlock the SSEG opportunity for end-users and
annual assessment payment, so property owners installers, engineering, procurement and
are immediately cash-flow positive. It would be construction contractors (EPCs), and ESCos by
premature to calculate a potential market size providing accessible and affordable financing13.
PACE Entity as the exploration of this model has only just
■ Provides financing to ESCos or installers. started in South Africa. Banks’ offerings include mechanisms that
■ Has list of criteria which need to be met cover 70% to 100% of capital costs with a five-
by property and the property owner Energy services company (ESCo) Commercial bank offering12 to ten-year loan repayment. However, by making
before a ‘special assessment’ is made ■ Installs resource efficient technology Financing for SSEG, specifically rooftop solar use of pre-selected EPCs and meticulous energy
on the property. on properties that meet the list of PV, is underpinned by thousands of small audits, banks ensure that financed projects
■ Collects funds via the municipality criteria set out by the PACE entity. contracts with consumers. Traditionally, are designed so that the customer’s savings
which fulfils its role as the rates ■ Is financed by PACE entity. commercial banks have favoured big solar/wind generated from the solar installation are
collection facility via the ‘special farms because they are generally based on greater than the loan repayments. This
assessment’ which is included on the contracts with investment-grade utilities and results in a positive cash flow.
property’s rates bill. international companies. Only in the past two
years have the majority of the commercial banks Commercial banks are understandably risk averse,
started to provide tailored mechanisms for seeking high returns on their investments. The
Property rooftop solar PV investments. fact that they see this market as a meaningful
■ The property must meet a list of opportunity, and have designed specific funding
Municipality criteria set out by the PACE entity in Commercial and residential debt largely remains mechanisms for SSEG systems, is indicative of the
■ Usually serves as rates collection facility. order for the ESCo to be financed to closely tied to strong individual credit scores and reduced risk in the market as well as the potential
■ Can be financing mechanism install the technology. existing bank-customer relations. financial returns available in the market.
“PACE Entity”. ■ A ‘special assessment’ of the property
■ More than likely earn an is done, and is paid to the municipality,
administration fee. similar to a rates payment.
■ The ‘special assessment’ is included
on the rates account as a separate
line item.
Property owner ■ If there is a default on the payments,
■ Is liable to pay the specially assessed the next owner will be liable to pay the
rate for the installed technology on overdue amount.
the property.
■ When first approaching or
approached by the ESCo, the building
owner needs to meet certain criteria
set out by the PACE entity.
■ Potential property owners must
agree to the ‘special assessment’
on the rates account and agree to
continue paying this before they can
own the property.
© Nicholas Fordyce
Figure 6: PACE financing mechanism
12
More information on commercial banks’ offerings and other innovative green finance mechanisms is available in GreenCape’s Energy
Finance industry brief. Access it here: https://www.greencape.co.za/content/financing-solar-pv/
13
Most commercial banks do not offer standalone services. e.g. for solar PV finance, customers would need to make use of other bank
products as well (a business account etc.).
22 Energy Services: Market Intelligence Report 2020 Energy Services: Market Intelligence Report 2020 23Table 9: South African commercial banks on solar PV for C&I
Solar PV in Solar PV in
the C&I the C&I
Sector Sector
Main ■ Depends on customer profile and ■ Nedbank secures Debt solutions are tailored Typical Amortising debt at up to 100% IPP with Special Purpose Depending on the financial
investment their needs. term-loan financing over to suit client needs and payment loan-to-cost. Vehicle: 60% Debt/40% position of the borrower,
instrument the underlying assets could include: structures in Equity. Asset Based Standard Bank can consider
■ The main funding opportunities
for PV of the project. ■ Instalment sale loans. C&I sector Finance and Term Loans up funding of up to 100% of the
to date have been for customers
to 100% of project cost. installation costs.
installing solar PV and integrating ■ There is an installment ■ Medium term loans. The loan is normally
energy production into their existing sale/ asset-based
amortized but stepped
business. Therefore lending is finance option, and
repayments, aligned to cash
against existing balance sheets structured finance
flow can also be considered.
(with a view of the cash flows from options for power
the installation). This changing purchase agreements.
with growth in Absa’s lending to Are you Absa have seen growth in commercial Yes, 10% of deals are PP- The PPA market is growing
commercial and industrial power seeing more and industrial PPAs in recent years, and funded; however, as the rapidly with many new
purchase agreements. power we expect significantly higher growth in concept of PPA’s grows, the entrants in the market.
purchase 2019. We will continue to support the number of deals will follow. Currently, ~60% of our basket
■ Asset finance, unsecured finance
agreements growth of this market segment as a is funded under a PPA
and property finance products
being funding partner. structure. Where repayment is
are all potential financing
funded? dependent on a PPA, it is
solutions.
important to ensure:
Investment Absa currently focuses on individual ■ No minimum size. There is no real limit ■ Tier 1 equipment is
size projects of up to 1 MW, due to greater for loans for solar PV installed.
■ Nedbank must be the
requirements clarity around embedded generation installations; however, ■ Contracted revenue is
sole primary banker
and no licensing requirements, and have Standard Bank typically sufficient for repayment.
to the obligor.
financed commercial and industrial finance individual projects
■ Sustainability of the
installations as small as 30 kWp. up to 999 kWp in size.
offtaker.
The viability of a PPA is
Larger portfolios and
strongly impacted by the
investments are evaluated
contracted tariff structure.
on a case by case basis.
Other things ■ Have had a team dedicated to ■ No preferred supplier list Standard Bank has a focused
Investment 5 to 10 years Tenure up to 10 years per Debt tenures can go up to 10
to note? Renewable Energy (with strong focus for suppliers of strategy for renewable energy
period project. years currently, negotiated
on C & I market for solar PV) for a equipment but each which enables them to provide
-but this is case-specific
couple years and this remains a key supplier/installer will be tailored financial support to
and not the norm.
focus sector. vetted individually. companies operating within
the energy services value
Security/ ■ Project specific and additional Security can be taken Collateral-based ■ Focus on the sector is not only related ■ Nedbank’s clients
chain. These include, but are
collateral security might not be required. against the asset but often is contractual agreement; to funding. typically have turnovers
not limited to EPCs, developers,
requirement taken against the underlying however, the lending of R7m or more and have
■ Absa takes the cash flows of the solar asset owners, or
for debt balance sheet of the client. principles have been aligned Please email to attend any of our been in business for a
installation into account. distibutors. Solutions go
In the case of IPP’s security to the solar PV sector. customer events or receive any of number of years.
beyond loans and include
■ The installation seen as part of is based on the underlying our industry research and quarterly Nedbank prefers to deal
solutions such as:
the collateral. off-take agreements and newsletters. with the client when a
balance sheet. renewable energy ■ transactional support.
installation is being ■ trade finance.
Risk reduction ■ Guarantees on debt. At present, ■ Healthy cash flow, considered. Nedbank’s
including savings from relationship is with the Standard Bank tailors
■ Insurance. ■ The quality of the
installation. client and is guided by solutions specifically for each
product (certified
■ Second-hand market for solar assets. confidentiality project rather than relying on
installer). ■ Quality of the product. requirements. When a a one-size-fits-all approach.
■ The workmanship. ■ Backed by adequate client has decided on a
■ O&M history. insurance. supplier and is ready to
■ Financial positions of discuss financing,
In the near future: principal borrower and Nedbank will engage.
■ Wheeling. offtaker. ■ Rental discounting
■ Second-hand market for agreements are
■ Second-hand market for
solar assets. available for suppliers
solar assets.
(subject to being
approved by the Rental
Average Risk dependent The interest rate is based Offer a competitive interest Discounting team and an
interest rate on riskadjusted pricing rate. The actual rate is agreement is in place).
principles and varies impacted by many variables
depending on the project like the size of the deal, the
Contact Justin Schmidt, Head: Renewable Energy Mark Boshoff, Head Deerosh Maharaj, Manager
and client, while striving to amount, the debt tenure,
details (Retail and Business Bank): (Sustainable Development (Medical and natural
be competitive and the risk assessment etc.
for more justin.schmidt@absa.co.za Goals): resources): Deerosh.
market related. It therefore varies from
information MarkBo@Nedbank.co.za Maharaj@standardbank.co.za
transaction to transaction.
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