Globeleq closes USD-362m renewables refinancing in S Africa

Independent power producer (IPP) Globeleq announced today it has completed the senior debt refinancing of three of its renewable energy plants in South Africa totalling 238 MW.

The company said it has secured a debt financing package of ZAR 5.2 billion (USD 362m/EUR 306m) for which Absa Bank, part of financial services group Absa Group Ltd (JSE:ABG), served as the mandated lead arranger and sole underwriter.

The transaction represents the second refinancing of renewable assets under the Department of Mineral Resources and Energy’s (DMRE) Independent Power Producer Office (IPPO) Refinancing Protocol. It concerned the 138-MW Jeffreys Bay wind farm, as well as the 50-MW De Aar Solar and 50-MW Droogfontein Solar plants. Globeleq noted it hopes to eventually refinance its entire portfolio of assets in South Africa.

In June 2020, the IPPO asked owners of projects contracted under Rounds 1-3.5 to consider participating in a voluntary refinancing programme. The move will enhance the projects’ capital structures, leading to a reduction of the tariff to national utility Eskom. This particular transaction will result in savings of more than ZAR 1 billion for Eskom across the three assets over the remaining 12-year term of their power purchase agreements (PPAs), Globeleq estimates.

“Globeleq sees this transaction as enabling future secondary market debt, which in turn will stimulate new opportunities, jobs and contribute to the economic development of South Africa. We hope that other IPPs will look to do the same and reduce the cost of their power to Eskom,” said Mike Scholey, Globeleq’s CEO.

(ZAR 10 = USD 0.696/EUR 0.588)

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