Absa acted as a mandated lead arranger and lender for three Red Rocket Energy (Pty) Ltd (“Red Rocket”) renewable energy projects which reached financial close on 23 February 2023. The projects comprise of two 140MW wind farms, which will both be located in the Western Cape, and one 84MW wind farm which will be located in the Eastern Cape and developed at a total estimated cost of R12 billion.
These projects are being developed by Red Rocket as a sponsor. Red Rocket will also invest in the equity of the projects together with the IDEAS Infrastructure II Sub-Partnership (ultimately owned by Old Mutual Limited) and Jade-Sky Energy (Pty) Ltd. The power generated by these three wind projects will be supplied to Eskom under 20-year power purchase agreements (PPAs) and once operational, will have the capacity to supply approximately 480,000 South African households with power.
“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, designs, constructs, operates, and owns utility-scale grid-connected renewable energy projects with operations in multiple countries across Africa. The group currently has 606MW of projects in operation and under construction, more than USD 1bn invested, and a pipeline of projects amounting to more than 12GW, of which 1 GW will reach financial close within the end of the year.
