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Old Mutual: South Africa’s Major Solar Energy Investor


21 Jan. 2014 by

Old Mutual, the largest and one of the most well-established financial services providers in Southern Africa, is by far the country’s major investor in solar PV projects. It is investing in at least nine projects established under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) initiated by the government. Old Mutual is involved in 33% of the 27 solar PV projects in rounds one and two of this programme. Companies such as SolarReserve, Intikon and the Public Investment Company are following suit, with a smaller number of project involvements, but most investment companies limit their investments to one or two projects.



 
With many REIPPPP projects emerging this year, the South African solar PV market is booming. It is expected that, upon the financial closure of rounds one and two of the programme in 2015, over four million solar panels will have been installed, with a potential further 1.6 million to follow by the financial closure of round three in 2013. These projections indicate that South Africa’s installed solar power will grow from 25 megawatts in 2012 to around 1050 megawatts by 2015. And these are only the figures pertaining to the REIPPPP. Recently, wineries, factories, supermarkets and mining companies have discovered that a solar PV system can save them money right away and help them hedge against inevitable energy price increases.

Both of these developments will be key topics discussed at the third edition of the leading international solar PV conference The Solar Future South Africa, 11 February in Johannesburg. The conference is organized by Solarplaza. Research by Solarplaza of public information revealed some remarkable facts about the investors and financers behind the projects in the REIPPPP. The equity providers investing in South Africa’s PV market are fragmented. Numerous investment companies limit their investments to one of two projects. Old Mutual is the leading investing company, with involvement in some of the largest REIPPP projects such as the Kalkbult PV project (75 MW), the Lesedi and Letatsi solar PV projects (75 MW each, equity provided by Old Mutual-managed IDEAS-Managed Fund) and the Dreunberg project (70 MW). Solarplaza also found that, in addition to these relatively large projects, Old Mutual is involved in a few smaller projects, such as the Aurora (9 MW), Vredendal (9 MW) and Linde (37 MW). From a different angle, the data shows that, in terms of megawatts, the investment market is more uniformly distributed, but Old Mutual remains the major investor in the industry in terms of megawatts.
 

 
Another interesting fact discovered by Solarplaza is that the three largest financing parties are responsible for over 60% of all the financial closes within the REIPPPP programme. The Development Bank of South Africa (23%), Rand Merchant Bank (22%) and Standard Bank (18%) are involved in 63% of the total amount of megawatts financed. This means that the market for debt is much less fragmented. This could raise the question as to whether enough liquidity will be available in South Africa to finance additional large solar PV projects. It is precisely this question that financial experts from Standard Bank, Rand Merchant bank, IDC, Fieldstone and several other experts will discuss during the conference.
 

 
Solarplaza has invited all the key financial stakeholders to discuss the financial challenges and opportunities related both to the forthcoming REIPPPP rounds and to projects outside this government programme. A second conference track will discuss the competitive embedded solar (rooftop) applications for the commercial sector.
For more information about the event and the programme, please visit: http://www.thesolarfuture.co.za/ .


About Solarplaza International BV
The Dutch company Solarplaza (www.solarplaza.com) is a global leader in the organisation of top-level solar PV conferences, seminars and trade missions around the globe. Its mission is to empower the solar industry. The platform www.solarplaza.com provides and enables the sharing of knowledge, networking opportunities and information. Solarplaza firmly believes in a renewable future: a future built upon the power of solar energy. Since Solarplaza was founded in 2004, the company has organised more than 50 events around the world and built up an extensive network of thousands of valuable friends, associates, business contacts and solar experts.