At approximately R 8.3bn, the debt raised for the Department of Energy’s Peakers Project, involving the construction of two open cycle gas turbine peaking power plants at Avon and Dedisa, with a combined capacity of 1005 MW, represents the largest Independent Power Producer (IPP) project in South Africa. It is also Africa’s first greenfields thermal IPP to date.
The Corporate and Investment Banking division of Absa Bank Ltd (Absa), member of Barclays, appreciates that energy is central to realising the African growth story.
“Focusing our global expertise in developing the continent’s fledgling Independent Power Production is squarely in line with our purpose to help people achieve their ambitions in the right way,” says Omar Vajeth, Head of Power, Utilities and Infrastructure, at the Corporate and Investment Banking division of Absa.
The project financing took nearly seven years to close and across that period Absa was appointed as:
- co-ordinating mandated lead arranger, along with Investec and the Development Bank of South Africa;
- technical and insurance bank for the project;
- account bank for the project’s companies;
- account bank for the project’s BEE companies;
- performance bond issuer; and
- one of the original providers.
“Since the two peaking power plants, which will run on diesel and gas, will be able to be switched on and off according to demand they will if future assist Eskom guarantee output during peak demand periods,” explained Vajeth.
The sponsors of the Department of Energy Peakers Project are GDF Suez (38%), Legend Power Solutions (27%), Mitsui (25%) and the Broad-Based Black Economic Empowerment (BBBEE) Peakers Trust (10%). The total project cost for Avon and Dedisa is R9.7bn (USD 970mn) amounting to a total senior debt commitment of R8.3bn (USD 830mn).
As co-ordinating mandated lead arranger, Absa is playing a critical role in the structural economic development in this country.
“Working in concert with Barclays, Absa is proud to have acted as on this first-of-its-kind finance deal for French independent power producer, GDF Suez. Ours is a partnership built on the local and global expertise of Absa and Barclays, and the extensive vision of GDF Suez,” concluded Vajeth.
Note to the editor:
About Corporate and Investment Banking at Absa:
Corporate and Investment Banking, a division of Absa Bank Limited (Absa) and a member of Barclays, is a leading South African corporate and investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe.
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