Deadline: 30-Sep-21
The Development Bank of Southern Africa (DBSA) is inviting all private sector entities and energy developers to submit proposals in response to South Africa’s Embedded Generation Investment Programme (EGIP).
EGIP seeks to provide first loss facilities and Broad Based Black Economic Empowerment funding to support the implementation of embedded generation renewable energy projects in South Africa. The projects under EGIP will be implemented by private sector entities (in their capacity as Independent Power Producers and/or off-takers) and local municipalities (acting primarily as off-takers). The underlying Power Purchase Agreements (PPAs) under EGIP are not expected to be underpinned by Government Guarantees.
The overall objective of the Embedded Generation Investment Programme (EGIP) is to support the development and upscaling of the solar PV and wind RE Embedded Generation Projects developed by independent power producers (IPPs) operating in South Africa.
Funding Information
- A facility of approximately U$D200 million has been secured to implement solar photovoltaic and wind renewable energy projects in South Africa.
- The DBSA has matched GCF’s US$100 million funding, thus ensuring there is a funding contribution of US$200 million towards the implementation of EGIP from the two institutions. Approximately US$84 million of the US$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 in itself an impetus for the implementation of EGIP and the various shovel ready embedded generation projects in the market.
Qualifying Criteria
Key Qualifying Criteria include:
- Applicant: Independent Power Producers
- Project Size: 10 MW to 75 MW
- 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.
- Location of projects: South Africa
- Grid connection: Only Grid Connected Projects
- Technologies: Solar PV and Onshore a Wind
- 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.
Selection Process
- Non-Qualifying Applications: 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 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 & 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.
For more information, visit https://www.dbsa.org/press-releases/dbsa-opens-call-proposals-embedded-generation-investment-programme-south-africa