RMB Empowers The Oya Hybrid Energy Plant As Sole Mandated Lead Arranger
RMB Empowers The Oya Hybrid Energy Plant As Sole Mandated Lead Arranger. RMB has partnered with ENGIE, one of the largest Independent Power Producers (IPP) in the world, and leading local renewable energy developer and IPP, G7 Renewable Energies, as sole Mandated Lead Arranger and Bookrunner (MLA) for Oya Hybrid Energy Plant. This innovative co-located dispatchable renewable energy generation facility is the largest plant of its kind in Africa and represents a significant step forward in addressing South Africa’s ongoing power problems.
The Oya facility comprises 155 MW solar PV, 86MW wind and a 92 MW / 242 MWh Battery Energy Storage System (BESS), each of which represents a large plant on its own in the South African context. When combined and located at the same site, the 128 MW contracted capacity, dispatchable power plant stands as a significant contributor to renewable energy by global standards.
The project was selected as a preferred bidder under the Department of Mineral Resources and Energy’s Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) in 2021. In addition to its role as MLA, RMB underwrote the senior debt and contingent facilities, and performed the roles of hedging bank, account bank, and facility agent. RMB also provided funding for two of the Black Economic Empowerment (BEE) shareholders to facilitate their participation in the transaction.
“The Oya Energy project represents a complex technical solution not previously seen in the market, which meant that it was a challenging transaction both to structure and to syndicate. The combination of the three technologies, all co-located in the Western Cape, enables Oya to meet the RMIPPPP requirement of being fully dispatchable between 5:30am and 9:30pm daily. In this way, Oya is able to provide reliable, predictable, renewable energy into the South African grid, throughout the day, including the times when it’s most needed,” says Daniel Zinman at RMB.
The Oya Energy project is a significant milestone in South Africa’s renewable energy journey. While there have been many wind and solar projects closed, both under REIPPPP and in the private power sector, the tariffs have always been on a take-or-pay basis: in other words, the buyer pays only when the plant generates power, but these plants only generate when the sun shines or the wind blows. Oya is one of South Africa’s first dispatchable renewable energy plants, enabling the buyer (Eskom) to procure power up to the stated capacity of 128MW any time between 5:30am and 9:30pm. This makes a meaningful contribution to the grid and will help to offset power demand during peak hours.
“Bringing the deal to fruition required the team to think on its feet, and adapt continually, particularly given the stop-start nature of the programme. The successful closing highlights RMB’s ability to not only underwrite a large debt quantum and successfully syndicate to other lenders, but to structure complex transactions, with innovative products that flex to meet changing needs, a critical requirement in the evolving IPP space,” adds David Jones, at RMB.
