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SOLA Group secures $26.1 debt financing for solar PV projects in South Africa

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SOLA Group, South Africa’s solar PV builder has secured R400m ($26.1m) from  African Infrastructure Investment Managers (AIIM), and Nedbank Energy Finance to provide affordable solar PV solutions for individuals and businesses in Southern Africa.

AIIM) recently raised $320 million from investors from Africa, Europe and Asia for big-ticket power, transport & energy projects in Africa.

The fund has invested in BBOXX New Generation Utility in Kenya and are shortlisted on the Nairobi-Nakuru Highway PPP. It’s latest raise, African infrastructure fund, AIIF3, makes the cumulative commitments to $2.2 billion over 7 funds and executed more than 56 transactions in target pan-African markets. This round will help SOLA Group expand its operations.

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SOLA Group installs, owns and operates solar PV facilities, selling solar energy to corporate clients and utilities through solar Power Purchase Agreement (PPA) allowing businesses to pay off and maintain their own solar energy systems at no upfront costs, while enjoying the immediate benefit of cost savings.

The funding will help with SOLA’s finance options, so that its customers can avoid upfront purchase and installation costs, while continuing to enjoy the benefits of clean energy, with the knowledge that they are supporting a sustainable future.

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The renewable energy fund, dubbed Orionis, will see SOLA Group build 40 MW of solar PV projects for its corporate clients as an alternative for electricity.

Build 40 MW of solar PV projects

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According to Chris Haw, chairperson of the SOLA Group: “This partnership brings together three highly experienced entities whose combined skills offer consumers clean energy solutions at a time when our country desperately needs it.”

The deal includes 15 MW of solar PV Power Purchase Agreements, which will allow buyers to pay 20% less than what they for to Eskom or other providers.

Secure and cheaper power, and free up capex

PPAs or financed renewable energy projects enable industrial facilities to access secure and cheaper power, and free up capex for investment into their core business activities.

Globally, solar PV power is rapidly becoming the cheapest form of power to procure globally but because solar PV projects require large sums of capital to be constructed and launched, such funding will help firms such as Sola Group to buy their PV systems outright, own them and reduce their operating expenses.

SOLA’s PPA offering, through consolidating the finance, design, construction and operation of solar projects, allows companies to access cheaper finance than procuring it individually. Allowing small-scale, and flexible embedded generation of electricity is a key aspect to transition to a low-carbon economy, as it allows for increased penetration of renewables. 

Lower tariffs and more competitive rates

“Operating at scale allows SOLA to provide lower tariffs and more competitive rates, reducing costs of financing. The model of electricity generation that incorporates both centralised and distributed electricity will improve the ability for South Africa to meet energy demand, reduce electricity costs and strengthen resilience to outages,” concluded Haw. 

Since 2008 the SOLA group has led the way in the greenfield project development for large-scale solar PV farms, developing over 265 MW of solar PV projects alongside a pipeline of 750 MW worth of projects under the banner of its previous company, Aurora Power Solutions.

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