DBSA calls for proposals, embedded generation renewable energy projects

The Development Bank of Southern Africa (DBSA) has recently announced the launch of a $200 million investment program aimed at supporting embedded generation renewable energy projects in South Africa. This initiative comes on the heels of South African President Cyril Ramaphosa's announcement of a 100 megawatt cap for embedded generation, marking a significant shift towards power generation outside of the traditional utility provider, Eskom. Mpho Mokwele, Head of Project Finance at the DBSA, outlined the objectives of the investment program in an exclusive interview with CNBC Africa. Mokwele emphasized that the DBSA's goal is to accelerate the implementation of renewable energy projects in Africa, particularly outside of government-led programs that are supported by guarantees. The DBSA raised a significant portion of the funding for this initiative through the Green Climate Fund, securing $100 million in concessionary funding, which was then combined with the bank's own resources to create a competitive funding package. One of the key features of the DBSA's investment program is the allocation of $84 million towards ensuring the participation of black individuals and local communities in the embedded generation projects. This commitment to promoting inclusion and diversity in the renewable energy sector aligns with the broader agenda of transformation and empowerment in South Africa. The mechanics of the investment program revolve around developers of renewable energy projects entering into power purchase agreements with commercial and industrial companies, bypassing traditional utility providers like Eskom. This model opens up opportunities for entrepreneurs in the renewable energy space to access funding for their projects, capitalizing on the growing demand for clean energy solutions in the commercial sector. The DBSA's initiative has been designed as a crowd-in funding mechanism, aiming to attract a diverse range of stakeholders to participate in the transition towards embedded generation. By fostering partnerships with commercial banks and other financial institutions, the DBSA seeks to catalyze investment in renewable energy and accelerate the pace of implementation in response to the pressing energy supply constraints facing South Africa. Since the call for proposals was opened on the Fourth of August, the DBSA has received significant interest from project developers seeking financing for their embedded generation projects. The bank's transparent approach to funding availability and its proactive efforts to raise awareness about the initiative through various channels have contributed to a surge in project submissions. Looking ahead, the DBSA remains committed to driving sustainable development in South Africa's energy sector through its embedded generation investment program. By mobilizing financial resources, promoting inclusive participation, and fostering collaborative partnerships, the bank aims to play a pivotal role in advancing the transition towards renewable energy and supporting the country's energy security objectives.