Corporate and investment bank RMB reports that it financed renewable-energy investments worth R50-billion over the past year and is expecting ongoing high levels of renewables funding this year, while positioning itself to also finance private grid projects in future.

Infrastructure sector solutions head Judy Kobus reports that the bank’s funding has supported projects with a combined capacity of 2 400 MW, which were implemented on the back of both public and private procurement initiatives in South Africa.

About 1 500 MW of the new capacity financed had arisen because of recent reforms in the electricity market, enabling private projects of any size to proceed without a licence, including projects that wheel electricity through Eskom and municipal networks.

RMB reports that it has collaborated with various energy-intensive clients over the past two years, including Sibanye, Anglo American, Sasol, Harmony, and Richard’s Bay Minerals. It has also supported independent power producers (IPPs) such as ACED, Mainstream, Red Rocket, SOLA Group, EDF Renewables, Engie, G7 and Scatec.

Kobus reports that RMB approved about R40-billion in funding last year and acted as the sole mandated lead arranger in most cases.

It expects to approve another R40-billion to R50-billion in the current financial year for projects arising from both the private and public markets, as well as opportunities arising in the rest of Africa, having recently funded a 60 MW project in Selebi Phikwe, Botswana.

The bank has introduced new financing structures, including preference-share products and various inflation-linked instruments, to enable IPPs to adjust to the lower equity returns associated with a maturing market.

Despite delays in South Africa’s legislative reforms and Eskom’s recent objections to the licensing of traders, Kobus is optimistic that the market will continue to evolve to embrace traders and aggregators, which she says are able to offer more flexible power solutions to smaller consumers.

While no specific funding has been set aside for private high-voltage grid projects in the coming year, she is convinced that such projects will begin to materialise in time.

“More dispersed power generation will require more investment in the grid,” she says, indicating that the public-private partnership frameworks used to facilitate other infrastructure could be used to procure new transmission infrastructure.

“From our side, this is definitely a space that we want to play in quite actively.”