Rand Merchant Bank gives private power merchant market a boost with the financing of the SOLA Group Solar PV Project

RMB has partnered with experienced South African-owned Independent Power Producer (IPP) SOLA Group (“SOLA”) for the raising of a R2.8 billion debt and equity package for their 150MW multi-offtake Solar PV Project near Virginia in the Free State. The project is one of the first multi-buyer programmes in South Africa and is expected to reach commercial operations under numerous power purchase agreements (PPAs) in the middle of 2025.

This project is one of the largest Solar PV installations to be constructed in the South African power market and the first utility scale multi-buyer platform to be concluded in South Africa. It is set to sell power to multiple independent customers and includes an unallocated portion that will be sold to multiple clients and electricity traders. This is therefore the first wheeled project to offer a flexible power solution for corporates looking to buy cost effective green electricity through shorter-dated, dynamic contracts.

“This is the fourth utility-scale renewable wheeling project that SOLA has closed and commenced construction on in the last 15 months. The project firmly establishes SOLA as South Africa’s leading IPP engaged in the sale of power to private buyers and brings the Group’s portfolio to 581 megawatts of wheeling capacity currently under construction,” says Katherine Persson, the head of SOLA Assets.

The complex solution being implemented by SOLA requires deep sector expertise, which the SOLA team has gained over a 15-year period, having initially focused on small scale commercial and industrial projects and then ultimately transitioning to utility scale projects with the lifting of the private power generation cap. This dynamic journey makes SOLA one of the leading South African owned IPPs in the market.

“This project is a first of its kind given the merchant market electricity trading strategy being implemented and led by experienced IPP, SOLA. From a partnership and financing perspective, SOLA reached out to RMB, and the respective teams formulated a highly structured and innovative financing solution straddling both debt and equity. The senior debt financing required flexible structuring whilst the equity and shareholder level financing allowed us to support and partner SOLA with a bespoke funding package. This unique equity financing solution reaffirms our position as the leading infrastructure equity financing house in the market” says Kwabena Malgas, Head: Infrastructure Equity at RMB.

RMB also acted as Joint Mandated Lead Arranger under the senior debt tranche and Equity Bridge Loan, and supported UBuzwe Energy (“UBuzwe”), who is a key client, into the structure, thereby acting as sole Preference Share Provider for the project.

“The senior debt package for this transaction was particularly innovative, offering shorter-dated financing solutions which align with the dynamic short-term demand for green electricity in the sector. We are proud to be a part of this market-shaping transaction, which will further strengthen our position as a leading financial partner in the private power market, and are pleased to begin what we believe will be a long-standing partnership with leading IPP, SOLA,” concludes Sindisiwe Mosoeu, Senior Transactor in the Infrastructure Sector Solutions team.

RMB is a leading African Corporate and Investment Bank.