The Development Bank of Southern Africa (DBSA) has announced plans to support embedded generation through the construction of wind and solar plants ranging in size from 10MW to 75MW.
The Embedded Generation Investment Programme (EGIP) is an initiative developed with funding from the Green Climate Fund (GCF) and the DBSA. The programme supports the implementation of solar photovoltaic (PV) and wind energy embedded generation projects developed by Independent Power Producers (IPPs) operating in South Africa.
APPLICATIONS DUE: 30 SEPTEMBER 2021
The DBSA has matched GCF’s $100 million funding, thus ensuring there is a funding contribution of $200 million towards the implementation of EGIP from the two institutions. Approximately $84 million of the $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 an impetus for the implementation of EGIP and the various shovel ready embedded generation projects in the market.
Purpose of the DBSA embedded generation call for proposals
The DBSA seeks to support embedded generation projects under the Embedded Generation Investment Programme (EGIP). The selection will be conducted through a competitive process. The DBSA has the sole discretion to respond to multiple agency objectives in making its selection, including climate impact and gender mainstreaming potential of the project.
EGIP selection criteria
A project may be eligible for funding support under the programme if its objectives are climate mitigation related. The projects should also provide co-benefits of a developmental nature. An environmental and social risk assessment will be performed on eligible projects based on the environmental and social safeguard standards of the DBSA.
Key Qualifying Criteria include:
- Applicant: Independent Power Producers
- Location of projects: South Africa
- Technologies: Solar PV and Onshore Wind
- Project Size: 10MW to 75MW
- Grid connection: Only grid connected projects
- 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.
- 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.
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 the 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 and 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.
Questions relating to this call
Applicants are welcome to submit questions about the call for proposals to DBSA. DBSA will respond to each applicant individually.
For additional information about DBSA, please see www.dbsa.org