Standard Bank, Africa’s biggest bank by assets, recently announced the successful close of a R1.92 billion equity financing solution for H1 Holdings (H1), a leading Black-owned infrastructure investment and development company.
The funding solution, structured and executed by Standard Bank Corporate Investment Banking, was designed to facilitate the exit of an investment provided by British International Investment (BII), Industrial Development Corporation (IDC) and Norfund. The proceeds are underpinned by H1’s 49% interest in the Kenhardt hybrid battery and solar risk mitigation projects, which collectively represent Africa’s largest hybrid renewable energy cluster and one of the largest in the world.
“The transaction demonstrates our role in structuring complex equity financing solutions to support infrastructure development and deliver value to stakeholders,” said Calvin Alwar, Deal Lead, Structured Capital at Standard Bank. “We are proud to have partnered with H1 Holdings on this deal and look forward to collaborating further on this transformative project as they continue to shape the future of energy in Africa,” said Alwar.
Hybrid systems integrate different energy sources to compensate for the variability of renewable energy generation. Thus they present the environmental benefit of lowering carbon emissions and they reduce the risk of outages as energy is produced through more than one source. They do however require advanced control systems to manage different inputs, and these contribute to the project cost. The transaction required a fundamental shift in how renewable energy equity finance deals are structured, particularly given the high gearing levels and the limited window of bankability.
H1 Holdings, which aims to improve the quality of lives by producing cleaner energy, is a 100% Black-owned infrastructure investment and development company with a strong track record in the energy sector. Among other assets, the company has built a portfolio of 24 projects totalling about 2.8 GW of generation capacity and 1.14 GWh of storage capacity.
Commenting on the transaction with Standard Bank, Jonathan Muller, Head of Asset Management at H1 Holdings said: “Standard Bank’s expertise in the energy sector, its innovative approach to structuring the financial solution, and unwavering commitment to our objectives made this deal possible. Kenhardt is a flagship project for us, and this financing solution ensures we can continue to deliver sustainable energy solutions at scale,” Muller said.
For more information visit: www.standardbank.co.za