Standard seeks bigger slice of renewable power funding
● ‘Big Blue’ has a share of 30% in the funding of the renewable independent power producer programme in SA
Standard Bank, which already has a market share of more than 30% in funding the renewable independent power producer programme (REIPPP), is looking to stretch this further with the opening of bid window 7.
The government launched bid window 7 in December, targeting the development of 3,200MW of wind and 1,800MW of solar PV power. The “Big Blue’’, as Standard Bank is known in financial services circles due to the size of its balance sheet, has a market share of just more than 30% in the funding of REIPPP.
Zaid Moola, head of corporate & investment banking at Standard Bank SA, said the introduction of REIPPPs in 2011 heralded a new age of competition, innovation, and complexity within the energy mix.
“Our unwavering commitment to our climate goals and a sustainable future is evident in our support for a just transition.
“We aim to achieve net-zero carbon emissions from our newly built facilities by 2030 and from our existing operations by 2040. By 2050, we plan to reach net-zero carbon emissions from our financed emissions portfolio,” said Moola. “As the funding paradigm continues to evolve, funders are not only competing on price and service but are also more innovative in developing new models, through partnering with clients.
“This evolution highlights the growing significance of the sector in enhancing market efficiency and driving the adoption of renewable energy in SA’s energy mix.”
Since the launch of its climate policy in March 2022, the group has been tracking ahead of its target to raise R250bn-R300bn for sustainable finance by the end of 2026.
The bank’s strategy is centred on a transition away from finance for coal-fired power, including a commitment to no further financing for the construction of new coal-fired power plants or for the further expansion of generating capacity of existing coal-fired power plants. To this end, it wants to limit thermal coal exposures to 0.70% of group loans and advances in 2021 and 0.50% by 2030. Standard Bank also wants to reduce group advances to upstream oil 5% by 2030.
Financing sustainable energy infrastructure is the fastestgrowing part of the group’s corporate & investment banking business, with the group having identified it as the single largest growth opportunity in the coming years.
Moola said the regulatory changes, which have removed the cap on the amount of energy that individual businesses can produce, have underscored the importance of new supply which could include a level of aggregation.
“With businesses now able to invest more in their own generation capacity, the need for more innovative models, for example through aggregation, is expected to grow, making them an indispensable part of SA’s power context,” said Moola.
Standard Bank said it had enabled clients to install 168MW of decentralised power in the past year, easing the burden of load-shedding and pressure on the national grid.
Bid window 6 saw a slowdown in activity for REIPPPs with only 56 bids received and no wind projects awarded in the window.
THE NEED FOR MORE INNOVATIVE MODELS, FOR EXAMPLE THROUGH AGGREGATION, IS EXPECTED TO GROW