Standard Bank spearheads the power market liberalisation in South Africa with more than 500MW
Standard Bank spearheads the power market liberalisation in South Africa with more than 500MW
There is a growing trend in energy procurements amongst some of South Africa’s leading industries including mining, industrial and consumer sectors.
By Standard Bank
There is a growing trend in energy procurements amongst some of South Africa’s leading industries including mining, industrial and consumer sectors.
Since restrictions were lifted on independent power production for businesses, there has been an increased investment trend in decentralised power procurement.
This trend has now grown, with Standard Bank’s support of decentralised energy expanded significantly over the last two years to more than 500MWs of new capacity under construction in South Africa.
500MW of power could supply more than 400 000 average homes in South Africa with power.
Since the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) inception in 2011, Standard Bank has been at the forefront of this transformative movement, committing over R250 billion (c. $14 billion) to alternative and renewable energy sources.
Decentralised energy refers to energy solutions that are generated and consumed locally, rather than relying solely on the national grid, it could also include wheeled power, with IPPs selling to corporates directly through a PPA. This approach includes renewable energy sources like solar and wind, which can be implemented in various sectors such as agriculture, mining, manufacturing, and real estate.
Rentia van Tonder, Standard Bank Head: Power says: “New developments through the adoption of policies towards an open market for power including provisions in the Electricity Regulation Amendment Act (ERA) for power traders and aggregation is driving the decentralised energy models in South Africa. We are seeing businesses investing in wheeled power solutions through aggregation or bilateral arrangements, combining those with off-grid solutions where relevant towards energy security. Standard Bank's innovative partnerships have enabled clients to install a range of solutions ensuring more flexibility and sustainable power for the future.”
In 2022 and 2023 alone, Standard Bank provided finance for 368MW of decentralised power, demonstrating an unwavering commitment to decarbonisation and sustainability. Notable projects included the Sola Group and African Rainbow Energy and Power, where the financing a solar PV plant at African Rainbow Minerals' platinum mining operations, delivering 270GWh of carbon-free electricity annually through a 20-year power purchase agreement.
The Cennergi's Lephalale Solar Project involved project financing for a 68MW solar project to power Exxaro’s Grootegeluk coal mine, reducing emissions by 36% and supporting Exxaro's renewable energy transition. More recently Standard Bank closed and started construction on the 155MW wind project through Seriti Green.
“These initiatives have not only bolstered Standard Bank's position in the market but also allowed us to think how to be more proactive and innovative in a competitive market where clients need more flexibility in procuring power whilst also significantly reducing their carbon footprint,” says van Tonder.
The shift towards decentralised energy solutions is alleviating pressure on South Africa's national energy grid, paving the way for a more resilient and environmentally conscious energy landscape.
Standard Bank remains dedicated to empowering clients in their journey towards a greener future, reinforcing the bank's role as a catalyst for change in the energy sector which is demonstrated through our dedicated sector focus on banking aggregators and traders towards more flexibility.
Standard Bank Group is the largest African bank by assets with a unique footprint across 20 African countries. Headquartered in Johannesburg, South Africa, it is listed on the Johannesburg Stock Exchange, with share code SBK, and the Namibian Stock Exchange, share code SNB.