Financial services provider Absa Corporate and Investment Banking (CIB) is providing R1.6-billion in facilities to FE Overberg for Phase 2 of the FE Overberg wind project in the Western Cape.  

Once completed, FE Overberg (comprising Phases 1 and 2) will constitute South Africa’s largest privately developed wind farm.

Red Rocket Holdings is the independent power producer (IPP) responsible for the development of the project, which has a total overall capacity of 380 MW for both phases.

With total debt facilities of R3.8-billion, the Phase 2 project will generate 150 MW of clean wind energy for Discovery Green, a licensed electricity trader and subsidiary of Discovery.

The debt facilities are expected to finance the project’s full lifecycle – from design and construction to operations and maintenance – ensuring the supplying of 100% renewable energy to Discovery Green’s customers under a 25-year power purchase agreement (PPA) between FE Overberg and Discovery Green.

The project is expected to provide green energy to Discovery Green’s customers at a competitive energy tariff.

Absa CIB acted as joint mandated lead arranger, joint hedge provider, joint senior lender and joint ancillary debt lender, facility agent and guarantee issuing bank.

“This transaction reflects the growing maturity of South Africa’s renewable-energy market and the critical role of private-sector-led wheeling solutions in unlocking new generation capacity.

“As more commercial and industrial players decarbonise their operations, the ability to structure scalable, bankable PPAs will be fundamental to accelerating a just energy transition,” says Absa CIB resource and project finance transactor Colin King.

The project deepens Absa’s strategic relationship with Red Rocket, with whom it has collaborated for over six years on renewable-energy development.

“This landmark private power multi-offtaker deal is a significant achievement in South Africa’s evolving energy sector, with Phase 2 bringing together Red Rocket, Discovery Green, Absa and other lending partners. It highlights the strength of innovative financing and independent power production in delivering renewable energy at scale.

“The ability to structure and finalise a multi-offtaker transaction of this magnitude is a game-changer, demonstrating that private entities can successfully navigate complex market dynamics to accelerate the transition toward sustainable power solutions,” says Red Rocket CEO Matteo Brambilla.

“The renewable-energy market is still in its infancy and delivering a project of this scale and complexity required us to chart new ground. Concluding our first major renewable-energy project sets a strong precedent for what’s possible, enabling a new renewable-energy model that meets the needs of a diverse range of businesses,” says Discovery Green head Andre Nepgen.