Globeleq’s solar plant debt restructuring to save Eskom R160m

Independent power company Globeleq says it has completed a R1.2 billion ($71 million) senior debt restructuring of its 31MW Soutpan solar power (Soutpan) plant based in Limpopo.

Standard Bank led the restructuring process along with the project’s original lender Vantage Green X Fund (RF).

Soutpan, which began operating in 2014, is among the first solar power plants built under the country’s renewable energy independent power producer procurement programme (REIPPP). Globeleq acquired a majority interest in the plant in 2019 and has since managed its full scope of operations.

In a statement issued on Monday, Globeleq’s CEO Mike Scholey said: “The successful Soutpan restructuring is an important transaction which will save Eskom more than R160 million over the remaining ten years of the agreement.”

“This is the fourth renewable project that Globeleq has restructured under the Department of Mineral Resources and Energy’s IPP (independent power producers) office refinancing protocol and further demonstrates our commitment to supporting initiatives that benefit energy users and encourage investment while load shedding continues,” he adds.

The company says that by lowering the cost of debt for the project, the refinancing makes way for a significant reduction in wholesale electricity prices from the plants.

It further notes that the restructuring creates an efficient capital structure, further enabling the release of funds for shareholders to reinvest in the power sector and accelerates equity distributions to Soutpan’s community and BEE (black economic empowerment) shareholders.

“Standard Bank is delighted to support Globeleq and underwrite Soutpan in the restructure of its debt which has allowed for a tariff saving to Eskom and ultimately the South African consumer,” notes Standard Bank’s executive of energy, infrastructure and finance, Sherrill Byrne.

“Standard Bank has been involved with Soutpan as mandated lead arranger and hedge provider since 2012 when Soutpan started construction.”

Alastair Campbell, Vantage Green X’s managing director, says the debt restructuring points to a matured market that is positioned to play a role in South Africa’s quest to solving the ongoing energy crisis.

Nondumiso Lehutso is a Moneyweb intern.