SOLA Group has secured R400 million in order to build commercial and industrial solar PV facilities across southern Africa.
The renewable energy fund Orionis will enable 40MW of solar PV projects to be built without capital expenditure by the electricity off-takers.
The deal is a result of a partnership between the SOLA Group, African Infrastructure Investment Managers (AIIM), and Nedbank Energy Finance, who have partnered to provide affordable solar PV solutions for businesses that are in dire need of electricity security.
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Financing onsite power for the C&I market
Chris Haw, the
“This partnership brings together three highly experienced entities whose combined skills offer consumers clean energy solutions at a time when our country desperately needs it,” said Haw.
SOLA’s extensive track record of developing and building solar PV has allowed for the development of the Orionis fund, which will have the ability to fund 40MW worth of projects.
The forthcoming pipeline already includes 15MW of solar PV Power Purchase Agreements, including several breweries and other industrial facilities around South Africa.
The consumers pay for their clean energy directly, through a PPA tariff that is typically 20% lower than Eskom or their municipal provider’s rates.
The financed model would allow sectors focused on short-term cost reductions in their Opex budgets.
This would allow reductions in operating costs and in carbon emissions, which are generally very important to industrial sectors. The financed solar PV is provided through a legal arrangement called a Power Purchase Agreement (PPA).
A commercial solar PPA enables a fully integrated solar photovoltaic system to be installed and provide electricity to the entity through a customised monthly payment plan, typically at a tariff that is 20% lower than Eskom.
What is in a PPA?
PPAs can also include the option to take ownership of the PV system at the end of the financed period, with no upfront installation costs.
The conditions of power purchase are detailed in the PPA, which is negotiated directly with each client to ensure the agreement is workable for both parties.