GuarantCo & BII Partner with Etana Energy to Unlock $500M for South Africa’s Renewables

GuarantCo and British International Investment (BII) have partnered with South African energy trading company Etana Energy to unlock up to $500 million for renewable energy projects in South Africa.

This collaboration involves a groundbreaking $100 million guaranteed finance facility, which will help facilitate the development of approximately 500 megawatts of new wind and solar capacity over the coming years.

This initiative is particularly significant as it marks South Africa’s largest transaction within the energy wheeling framework, allowing electricity generated from renewable sources to be transmitted across the national grid to commercial and industrial users.

The $100 million guarantee will be split equally between GuarantCo and BII, with each organization contributing $50 million.

This innovative financing approach aims to provide independent power producers with revenue certainty, which is crucial for attracting investment in renewable energy projects.

By ensuring that developers have a reliable income stream, the partnership seeks to accelerate South Africa’s transition away from fossil fuels and towards cleaner energy sources.

The financing is expected to have a substantial impact on reducing carbon emissions, with estimates suggesting that it could cut approximately 1.2 million tons of CO2 emissions annually.

This aligns with the Just Energy Transition Partnership, an international initiative supported by various governments, including the UK, aimed at promoting sustainable energy practices in South Africa.

Etana Energy, co-owned by Chariot Limited and H1 Holdings, focuses on delivering competitive and sustainable power solutions by connecting power generation projects directly to users.

The company plans to leverage this guarantee to purchase electricity from private renewable generators and sell it to business customers.

This model not only meets local businesses’ needs for low-carbon and cost-competitive electricity but also enables new renewable energy capacity to be built.

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Evan Rice, CEO of Etana Energy, expressed confidence in the company’s business model, stating that securing such substantial guarantees from multinational financing institutions validates their approach.

He emphasized that this funding is a critical first step toward making Etana bankable, which is essential for the company’s growth and sustainability.

The partnership between GuarantCo and BII demonstrates ongoing international support for South Africa’s renewable energy sector.

BII, as the UK’s development finance institution, has committed to ensuring that at least 30% of its total new commitments between 2022 and 2026 will be directed towards climate finance.

This commitment reflects a growing recognition of the need for sustainable investment solutions in emerging markets.

GuarantCo plays a vital role in mobilizing private sector investment for infrastructure projects in lower-income countries.

Since its inception, GuarantCo has facilitated over $6.8 billion in total investments, improving access to infrastructure for millions of people across Africa and Asia.

The organization aims to close the funding gap for essential infrastructure projects by providing credit solutions that enhance local capital markets.

The partnership comes at a crucial time for South Africa as it seeks to diversify its energy sources and reduce reliance on fossil fuels.

With ongoing challenges related to energy supply and demand, initiatives like this one are essential for transitioning towards a more sustainable energy future.

The collaboration between GuarantCo, BII, and Etana Energy not only supports the development of renewable energy projects but also fosters economic growth by creating jobs and promoting local investment.

By enabling new projects focused on wind and solar power generation, this partnership aims to enhance energy security while supporting the country’s commitment to sustainable development.

As these initiatives progress, they will play a critical role in shaping South Africa’s energy landscape and addressing urgent environmental challenges through collaborative efforts in the renewable sector.