Financial company Standard Bank has closed a bespoke R1.92-billion equity financing solution for black-owned infrastructure investment and development company H1 Holdings.

The funding solution, structured and executed by Standard Bank Corporate Investment Banking, was designed to facilitate the exit of an investment provided by British International Investment (BII), the Industrial Development Corporation (IDC) and Norfund.

The proceeds are underpinned by H1’s 49% interest in the Kenhardt hybrid battery and solar risk mitigation projects, which collectively represent Africa’s largest hybrid renewable energy cluster.

Hybrid systems integrate multiple energy sources to compensate for the variability of each, offering the environmental benefit of lowering carbon emissions while also reducing the risk of outages as energy is produced through more than one source.

However, they do require advanced control systems to manage different inputs, which are contributing factors to the cost of these projects.

The transaction required a fundamental shift in how renewable energy equity finance deals were structured, particularly given the high gearing levels and the limited window of bankability, Standard Bank pointed out.

“The transaction demonstrates our role in structuring complex equity financing solutions that aim to support infrastructure development and deliver value to stakeholders. We are proud to have partnered with H1 Holdings on this and look forward to collaborating further on this transformative project as they continue to shape the future of energy in Africa,” said Standard Bank structured capital deal lead Calvin Alwar.

“We are thrilled to partner with Standard Bank on this milestone transaction. Their expertise in the energy sector, innovative approach to structuring, and unwavering commitment to our objectives enabled a novel technical solution that made this deal possible.

“Kenhardt is a flagship project for us and this financing solution ensures we can continue to deliver sustainable energy solutions at scale,” said H1 Holdings asset management head Jonathan Muller.