Energy
DBSA looks to support the development and funding of various technologies, energy generation, transmission and distribution and as a leading financier of renewable energy we are also committed to supporting a just energy transition in Africa.
Energy development
Energy is one of the fundamental contributions to developing services and products that save and improve lives. It supports the basic and important inputs in daily production and activities. Energy enables the powering of cutting edge tech equipment, communication tools and networks, and modern agriculture, among others, which stimulate economic development and growth of a country. Today, the demand for energy, specifically clean and reliable energy, continues to rise globally.
Numerous research and reports indicate that energy demand will double by 2050, owing to the increase in populations and rapid economic growth in African countries. While good strides had been made through the energy policies in many countries, sub-Saharan Africa still has the lowest energy access rates in the world, largely due to the lack of sustainable energy infrastructure.
To close the gap in the energy crisis on the continent, the DBSA looks to support the development and funding of energy projects from a multitude of investors to assist in building and transforming Africa. Moreover, solving the energy crisis helps us meet the national, regional, and global objectives outlined in the National Development Plan 2030, Infrastructure Vision 2027, Regional Infrastructure Development Master Plan, and the Sustainable Development Goals.
Energy infrastructure solutions
As a development finance institution, our purpose is to accelerate energy access for the people of Africa and ensure a just transition to low carbon economies. We make this possible by prioritizing projects with significant impact on the development of energy infrastructure. Our work also includes the implementation and management of energy programmes as well as the evaluation and monitoring of energy projects and programmes. These energy infrastructure programmes include; the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP), Climate Finance Facility (CFF) and the Embedded Generation Investment Programme (EGIP).
Through these development impact programmes, we’re able to finance a wide range of technologies across the energy value chain and offer the following products and services;
- arranging and underwriting
- on-balance sheet debt – vanilla loans
- project finance (cash-flow backed)
- BEE & BBBEE funding
- subordinated (mezzanine) debt instruments
- tenor extension – catalysing of the private sector (commercial banks and asset managers)
- sculpted and structured loans that match the expected project cash flows
- blended finance (tenor and interest rates)
- ability to provide Black Economic Empowerment (BEE) & Broad Based Black Economic Empowerment (BBBEE) funding
- guarantees and first loss instruments
As one of the leading development financiers in Africa, we have, in collaboration with our strategic partners and stakeholders, established initiatives that have enabled effective development impact.
The DBSA in partnership with the Department of Mineral Resources and Energy and National Treasury has played a key role in establishing the Independent Power Producers’ Office (IPPO) which subsequently launched the internationally acclaimed Renewable Energy Independent Power Producers Procurement Programme (REIPPPP). The REIPPPP has contributed to increasing South Africa’s energy supply, promoting the global climate change agenda and has realised many notable achievements including:
Enabling Broad-Based Black Economic Empowerment (BBBEE) companies and local communities’ participation in the projects at the equity level.
Continued support to BBBEE entities and local community trusts with funding to acquire equity stakes in future REIPPPP projects.
The DBSA has to date committed funding to 36 projects in South Africa’s REIPPPP Programme.
Committed approximately R18 billion across round 1 to round 4 under the REIPPPP.
Provided approximately R17.5 billion in senior debt to the projects and approximately R3.5 billion to BEE parties and local community trusts.
Support to a wide range of technologies under the REIPPPP including Solar Photovoltaic (PV), Concentrated Solar Power (CSP), wind, small hydro and biomass.
The Embedded Generation Investment Programme
The Embedded Generation Investment Programme (EGIP) is a programme developed with funding from the Green Climate Fund (GCF) and the Development Bank of Southern Africa (DBSA). The Programme supports the implementation of solar photovoltaic (PV) and wind embedded generation projects developed by Independent Power Producers (IPPs) operating in South Africa.
Outside of South Africa
Outside of South Africa, the DBSA also has deep experience and a track record of having successfully completed energy projects in the region. These include but are not limited to the following:
- Ithezi-Tezi hydro power project in Zambia. DBSA provided a debt facility of $23million.
- Kariba North Bank hydro power project in Zambia. DBSA provided a debt facility of $105million
- Cenpower Kpone 340MW thermal (combined cycle gas turbine) power project in Ghana. DBSA provided a debt facility of $53million.
- Area 1 LNG project in Mozambique. DBSA provided a debt facility of $120 million.
Stakeholders and beneficiaries
The DBSA collaborates with national, provincial and local governments to deliver against government priorities in this sector, particularly where the development of low-emission energy pathways is concerned. And, through our wide portfolio, we have stakeholders and beneficiaries to whom our mandate caters. These include, but are not limited to;
- Department of Mineral Resources and Energy
- Independent Power Producers’ Office
- Utilities
- National Energy Regulator of South Africa
- Municipalities
- Independent Power Producers
- Project Developers
- Black Economic Empowerment Parties
- Development Finance Institutions
- Commercial Banks
- Private Equity Institutions and
- Regional Power Pools (Southern Africa Power Pool, West African Power Pool, East African Power Pool, Central African Power Pool)
DBSA is committed to aggressively growing clean energy assets and a just transition to maximise sustainable development impact, including decarbonisation and, ultimately, impact the economic development and growth of our developing nations.