- H1 Holdings (“H1”) has partnered with The Standard Bank of South Africa Limited, acting through its Corporate and Investment Banking division (“Standard Bank”) to reach financial close on a long-dated R1.921bn equity funding facility.
- The transaction facilitates the exit of an investment provided in July 2022 by British International Investment (BII); Industrial Development Corporation (IDC); and Norfund (together, the “Existing Investors”), which had enabled H1’s acquisition of equity in the Scatec Kenhardt hybrid facilities (“Kenhardt” or the “Project”).
The transaction underscores the critical role of climate and development finance institutions in driving the energy transition and provided significant additionality and impact. BII, IDC and Norfund played a catalytic role in the Project’s early stages, enabling investment in South Africa’s first utility-scale hybrid facility through a novel procurement programme. The transaction returns R1.9bn (NOK1.07bn; US$110m) to investors, delivering strong returns over the investment horizon while freeing capital for reinvestment in new projects.
H1 co-developed and co-operate Kenhardt with Norwegian renewable energy company, Scatec. The Project ranks among the world’s largest hybrid solar PV and battery storage facilities. With 540 MW solar energy and 225 MW / 1140 MWh of battery storage, it supplies 150MW of dispatchable power daily from 5am to 9:30pm in South Africa. The Project avoids an estimated 870,000 tons of CO2 emissions annually and highlights how battery storage can enhance the role of solar energy across Africa.
Related news: Investec, Revego and H1 Holdings implicated in REIPPPP Bid Window 5 Tender Rigging Allegations
H1 Holdings controversy
H1 was a BBEEE partner in no less than 21 of 25 large-scale wind and solar projects awarded in South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Bid Window 5. Only 11 of the 25 projects awarded achieved financial close.
Broad-based Black Economic Empowerment (BBBEE) is an integration programme launched by the South African government, forming part of the governments broader Black Economic Empowerment efforts, to reconcile South Africans and address the inequalities of apartheid by attempting to compensate for land that was repossessed from Africans. It encourages businesses to integrate black people in the workspace, support black businesses, and give back to poor black communities affected by land repossession. Businesses are awarded points which they can claim on a BBBEE certificate which entitles them to a greater chance of obtaining government contracts. Link to the BBBEE Act here.
The renewable energy industry questions how H1 holdings won so many projects and by so doing, compromise the underlying principles of the BBBEE Act. Read more
Author: Bryan Groenendaal
