DBSA looks to support the development and funding of various technologies as well as energy generation, transmission and distribution. As a leading financier of renewable energy, we are also committed to supporting a just energy transition in Africa.
Since the announcement of the Embedded Generation Investment Programme in 2021, the DBSA is pleased to announce the approval of approximately ZAR8-billion worth of the Embedded Generation Investment Programme (EGIP).
The Embedded Generation Investment Programme is not just investment in energy infrastructure; it is a commitment to a sustainable and energy-efficient future. This initiative aims to foster the growth of embedded generation projects, bringing clean, reliable, and decentralised energy solutions to communities and the South African grid.
“As we move towards a greener tomorrow, the EGIP is significant in harnessing the power of renewable resources. From solar to wind, the Embedded Generation Investment Programme is set to diversify our energy landscape, reducing our carbon footprint and promoting a cleaner environment,” says Lungile Tom, Acting Head: Project Finance at the DBSA (pictured below).
In line with DBSA’s mandate of developing local communities, the key objective of this programme is to promote infrastructure development in a Just Transition manner. By encouraging embedded generation projects, we are not only contributing to a more resilient energy infrastructure but also creating opportunities for growth in social and economic development in line with a sustainable path trajectory. Some of the key facts of the EGIP at DBSA include:
Building Partnerships. We believe that collaboration is key to success. The Embedded Generation Investment Programme is open to partnerships with local and international lenders, innovators, entrepreneurs, and communities passionate about reforms in the energy sector. Together, we can achieve a sustainable future.
Investing in Innovation: The future belongs to those who innovate. Through this programme, we are actively seeking and supporting innovative projects that push the boundaries of embedded generation technologies. Ground-breaking ideas could be the next big leap towards a cleaner and more sustainable energy future.
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 population and rapid economic growth in African countries. While good strides have been made through the energy policies in many countries, sub-Saharan Africa still has the lowest energy access rates in the world, due to the lack of sustainable energy infrastructure.
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 sub-Saharan Africa and ensure a just transition to low-carbon economies. We make this possible by prioritising 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), the Climate Finance Facility (CFF) and the Embedded Generation Investment Programme (EGIP).
Through these development impact programmes, we can 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)
- 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) and Broad-Based Black Economic Empowerment (B-BBEE) 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.
Committed approximately R18-billion across round 1 to round 4 under the REIPPPP.
Provided approximately R15-billion in senior debt to the projects and approximately R3-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.
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
- National Energy Regulator of South Africa
- Independent power producers
- Project developers
- Black economic empowerment parties
- Development finance institutions
- Commercial banks
- Private equity institutions
- Regional power pools (Southern Africa Power Pool, West African Power Pool, East African Power Pool and 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 impact the economic development and growth of our developing nations.