Standard Bank Spearheads the power market liberalisation in South Africa with more than 500MW

In response to the growing trend of energy procurements amongst some of South Africa’s leading industries, including mining, industrial and consumer sectors, Standard Bank has over the last two years significantly expanded its support of decentralised energy to more than 500MWs of new capacity under construction in South Africa.

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Since restrictions were lifted on independent power production for businesses, there has been an increased investment trend in decentralised power procurement.

500MW of power could supply more than 400 000 average homes in South Africa with power.

Standard Bank has also been at the forefront of the transformative movement, the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) since its inception in 2011, committing over R250 billion to alternative and renewable energy sources.

Rentia van Tonder, Standard Bank Head: Power, says: “New developments through the adoption of policies towards an open market for power including provisions in the Electricity Regulation Amendment Act (ERA) for power traders and aggregation is driving the decentralised energy models in South Africa.

We are seeing businesses investing in wheeled power solutions through aggregation or bilateral arrangements, combining those with off-grid solutions where relevant towards energy security. Standard Bank’s innovative partnerships have enabled clients to install a range of solutions ensuring more flexibility and sustainable power for the future.”

Decentralised energy refers to energy solutions that are generated and consumed locally, rather than relying solely on the national grid. It could also include wheeled power, with IPPs selling to corporates directly through a PPA.

This approach includes renewable energy sources like solar and wind, which can be implemented in various sectors such as agriculture, mining, manufacturing, and real estate.

In 2022 and 2023 alone, Standard Bank provided finance for 368MW of decentralised power, demonstrating an unwavering commitment to decarbonisation and sustainability.

Notable projects included the Sola Group and African Rainbow Energy and Power, where the financing a solar PV plant at African Rainbow Minerals’ platinum mining operations, delivering 270GWh of carbon-free electricity annually through a 20-year power purchase agreement.

The Cennergi’s Lephalale Solar Project involved project financing for a 68MW solar project to power Exxaro’s Grootegeluk coal mine, reducing emissions by 36% and supporting Exxaro’s renewable energy transition.

More recently Standard Bank closed and started construction on the 155MW wind project through Seriti Green.

“These initiatives have not only bolstered Standard Bank’s position in the market but also allowed us to think how to be more proactive and innovative in a competitive market where clients need more flexibility in procuring power whilst also significantly reducing their carbon footprint,” says van Tonder.

The shift towards decentralised energy solutions is alleviating pressure on South Africa’s national energy grid, paving the way for a more resilient and environmentally conscious energy landscape.

Standard Bank remains dedicated to empowering clients in their journey towards a greener future, reinforcing the bank’s role as a catalyst for change in the energy sector which is demonstrated through our dedicated sector focus on banking aggregators and traders towards more flexibility.

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