- The Pele Green Energy facility has provided the IPP with a consolidated funding platform designed to enable an expansion from about 1 GW to 5 GW by 2027.
- PGE has taken equity positions alongside ENGIE in two 75MW solar PV projects, which achieved a financial close in late 2023.
Pele Green Energy (PGE) is considering additional funding options beyond the pioneering R2.5 billion Sithala facility concluded in November with Nedbank, Norfund and the Industrial Development Corporation.
This follows its recent success in securing new public and private power purchase agreements. The facility has provided the independent power producer (IPP) with a consolidated funding platform for the first time.
This design enables a competitive expansion in its operating portfolio from about 1 GW to 5 GW by 2027, as well as the capital needed to develop a project pipeline. It has also enabled PGE to refinance its existing group funding with a platform facility at the holding company level.
The Managing Director of PGE, Gqi Raoleka, stated that the innovative funding structure represents a material advance on PGE’s previous capital-raising frameworks, which involved raising funds on a project-by-project basis.
This earlier model, he says, was not demanding and time-consuming but also un-competitively priced, particularly for an entity seeking to evolve into a lead developer of projects that it both owns and operates.
PGE’s MD insists that PGE continues to value its partnerships with leading European and Middle Eastern IPPs and credits South Africa’s black economic empowerment policies for enabling such partnerships.
However, 15 years after its founding by a group of young black professionals, PGE intends to continue its evolution from its initial position of junior partner to that of either co-sponsor or majority owner.
The firm’s CFO, Matthew Wainwright, notes that the Sithala structure aligns with that ambition and has already enabled it to play a more assertive and competitive role in recent projects.
PGE has, for instance, taken “near pari-passu” equity positions alongside ENGIE in two solar photovoltaic projects awarded under the fifth bid window of the government’s renewables procurement programme, namely the 75MW apiece Grootspruit and Graspan projects, which achieved financial close in late 2023.
In addition, the facility has enabled PGE to secure a 20 per cent equity position in each of the three Koruson 2 clusters of wind and solar projects built by Envusa Energy, jointly owned by Anglo American and EDF Renewables. The projects have a combined capacity of 520MW.
Raoleka is also optimistic that Sithala will enable it to conclude its first PGE-led projects with a private off-taker in the coming months, representing a “major milestone” for the entity.