Africa needs a regulatory and policy framework to support investment in renewable energy

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SPONSORED | Bhavtik Vallabhjee, absa head of power, utilities and infrastructure, says the future for renewable energy projects is bright, but investors want regulatory and policy certainty. Read more.

The department of trade and industry needs a strategy on helping communities and small businesses participate in energy generation, whether in renewables or biofuels. Picture: DOROTHY KGOSI

Vallabhjee says the regulatory framework for renewable energy projects in sub-Saharan Africa differs from country to country, depending on the level of government commitment to support this sector. “As utilities may not be the most creditworthy or financially robust entities, some form of credit enhancement to backstop the utility is required. This could take many shapes or forms. For various reasons, government guarantees may not always be possible.”

Vallabhjee says Absa already has a solid track record as the pre-eminent regional bank in providing funding for renewable energy and conventional power projects. The bank has closed several deals in Africa in recent years. It understands the risks associated with power projects and can bring its vast experience to bear to structure, fund and close complicated, multi-sourced, multi-tranched project financing deals.

For example, more than 102 IPP projects in SA in the past nine years have brought about R200bn in direct investment. This compares with fewer than 30 IPPs in the whole of sub-Saharan Africa prior to the launch of SA’s IPP programme.

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Absa The first & second REIPPP projects were well constructed i think first class..but look what they did to Eskom. We are not sure whether investors want what's better for the country 'they're investing' in or their bags.

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