The Development Bank of Southern Africa (DBSA) is inviting all private sector entities and energy developers to
submit proposals in response to South Africa’s Embedded Generation Investment
Programme (EGIP).
EGIP seeks to provide first loss facilities and Broad Based Black
Economic Empowerment funding to support the implementation of embedded
generation renewable energy projects in South Africa. The projects under EGIP
will be implemented by private sector entities (in their capacity as
Independent Power Producers and/or off-takers) and local municipalities (acting
primarily as off-takers). The underlying Power Purchase Agreements (PPAs) under
EGIP are not expected to be underpinned by Government Guarantees.
The overall objective of the Embedded Generation
Investment Programme (EGIP) is to support the development and upscaling of the
solar PV and wind RE Embedded Generation Projects developed by independent
power producers (IPPs) operating in South Africa.
Funding Information
- A facility of approximately
U$D200 million has been secured to implement solar photovoltaic and wind
renewable energy projects in South Africa.
- The DBSA has matched GCF's
US$100 million funding, thus ensuring there is a funding contribution of
US$200 million towards the implementation of EGIP from the two
institutions. Approximately US$84 million of the US$200 million funding
will be utilised to provide Broad Based Black Economic Empowerment funding
to enable the participation and ownership of local communities and Small
Medium and Micro Enterprises in renewable energy projects under the
Programme.
- The recent announcement to
exempt embedded generation projects up to 100MW from having to apply for
generation licenses is in itself an impetus for the implementation of EGIP
and the various shovel ready embedded generation projects in the market.
Qualifying Criteria
Key Qualifying Criteria include:
- Applicant: Independent Power
Producers
- Project Size: 10 MW to 75 MW
- Eligible Off-takers: Projects
must have entered into take or pay Power Purchase Agreements (PPAs) with
commercial, industrial or municipal off-takers for a minimum period of 15
years.
- Location of projects: South
Africa
- Grid connection: Only Grid
Connected Projects
- Technologies: Solar PV and
Onshore a Wind
- Feasibility studies: Projects
must have completed feasibility studies including having obtained all
permits and licenses.
EGIP Product Offering
- Tenure: EGIP offers long dated
tenures of up to 18 years.
- Subordinated debt: EGIP offers
concessional subordinated debt which serves as a first loss facility.
- BBBEE funding: EGIP offers
concessional BBBEE equity funding to enable the participation of black
persons in the targeted projects.
- Local community funding: EGIP
offers concessional equity funding to enable the participation of local
communities in the targeted project location.
Selection Process
- Non-Qualifying Applications:
Each proposal will be reviewed against the criteria of the Call. Those
developers not selected for further due diligence review will be notified
via email. As selection process is very competitive, and DBSA receives
Applications from many highly qualified developers. Regrettably, DBSA does
not have the capacity to support all eligible developers that apply.
- Selection of Finalists: Subject
to the DBSA deal screening process, DBSA will determine which applicants
will be selected for further consideration. DBSA may select applicants for
further due diligence based solely on their written applications and will conduct
final due diligence of finalists.
- Recommendations &
Approvals: Upon the completion of due diligence, the DBSA will make its
recommendation for selecting one or more projects to DBSA’s Investment
Committees as appropriate. The DBSA reserves the right to recommend any of
the finalists or none of them.
Post Date - 05-Aug-2021