<strong>Absa finances three Wind Energy Projects that reach Financial Close in Bid Window 5 of the South African REIPPP Programme (REIPPPP)</strong>

Absa served as the designated lead arranger and lender for three Red Rocket Energy (Pty) Ltd (“Red Rocket”) renewable energy projects, which closed on February 23, 2023. The projects will consist of two 140MW wind farms in the Western Cape and one 84MW wind farm in the Eastern Cape, with a total projected cost of R12 billion.

As a sponsor, Red Rocket is developing these projects. Red Rocket will also participate in the projects’ equity alongside the IDEAS Infrastructure II Sub-Partnership (which is ultimately controlled by Old Mutual Limited) and Jade-Sky Energy (Pty) Ltd. The power generated by these three wind projects will be sold to Eskom under 20-year power purchase agreements (PPAs), having the ability to power roughly 480,000 South African households fully operational.

“Absa continues to support financing for renewable energy projects across Africa, including Government procured programs such as the REIPPPP and Commercial and Industrial projects with private off-takers, with more than 4GW’s of projects financed to date. This transaction strongly demonstrates our ongoing commitment to the sector and the acceleration of investments that make a sustainable impact on the communities we serve, whilst contributing to the supply of much needed new power generation capacity to the grid,” says Colin King, Principal within Absa’s Resource & Project Finance team. 

“The financing of projects in this sector is in line with Absa’s sustainable finance goals, which includes helping our clients on their journeys to becoming more sustainable and also in assisting Eskom with the transitioning from fossil fuels to renewable energy sources, thereby significantly reducing greenhouse gas emissions in South Africa. The REIPPPP is critical in helping Eskom add renewable power generation capacity to the national grid in line with the country’s just energy transition objectives and sustainable development goals,” says King. 

Red Rocket is a locally based, integrated renewable energy Independent Power Producer (“IPP”) that develops, plans, builds, runs, and owns utility-scale grid-connected renewable energy projects in different African nations. The business presently has 606MW of operational and under construction projects, more than USD 1 billion invested, and a pipeline of more than 12GW of projects, 1 GW of which will reach financial closure by the end of the year.