ABSA Group Limited, a South African bank, announced that it will finance 12 renewable energy projects in South Africa, in the month of August. These wind, solar and biomass projects will generate 1.2 GW of electricity in South Africa, worth a total of 22 billion rand (more than $1.5 billion).
Investment in renewable energy production has been on the rise in South Africa in recent months. In this context, ABSA Bank announced that it would inject 22 billion rand, or more than 1.5 billion dollars, into 12 renewable energy projects in South Africa. These include seven wind projects, four solar projects and one biomass project. The investments follow a call for tenders launched by the Ministry of Energy.
According to the South African bank, all the projects are spread over several provinces and will generate 1.2 GW of electricity in the coming years. “Feedback on the latest renewable energy projects in South Africa has shown that it is comparatively cheaper to produce energy from renewable energy plants,” said Bhavtik Vallabhjee, Absa’s electricity, utilities and infrastructure finance manager. “Most of our projects will provide electricity at a price of less than 0.70 rand (less than one cent) per kilowatt-hour, compared to the price of energy produced from thermal power plants, which are generally much more expensive.”
An engine for green energy production in South Africa
With nearly 40,000 employees and over 108 billion rand (over $7.6 billion) in assets in 2017, ABSA Bank is a major player in South Africa’s financial landscape. With the opening of the energy sector, notably through the Renewable Energy Supply from Independent Producers (REIPPP) programme, the investments are likely to increase. The twelve projects that the bank will finance benefit from the government programme. The name Absa has also recently been mentioned in the financing projects of the Ideas investment fund.
That brings to 33 the total number of independent power producer projects financed by ABSA, producing a combined capacity of 2.9 GW. Thus, pushes the company to think much bigger as it now plans to invest in renewable energy projects in Ghana, Zambia, Kenya and Tanzania; countries on the African continent that stand out by showing dynamism in policies concerning investments in the green economy.
Jean Marie Takouleu