RELP and the African Development Bank (AfDB), in collaboration with the Southern African Power Pool (SAPP), have developed a price guarantee product for renewable energy Independent Power Producers (IPPs) that trade on the SAPP merchant market.
AfDB and RELP have confirmed that they are developing an instrument that will guarantee renewable energy Independent Power Producers (IPPs) a minimum price when they are trading on the Day-Ahead Market (DAM) of the SAPP merchant market. Such a guarantee will give investors and lenders the comfort that the IPP will generate sufficient revenue to service its debt, supporting the project’s bankability, and bringing much-needed generation capacity to the Southern Africa region through the SAPP.
The Sustainable Energy Fund for Africa (SEFA), a multi-donor Special Fund managed by the African Development Bank, has allocated a 500,000 USD grant to support the initiative. In parallel, RELP is allocating significant resources in the development of this product, including the pricing forecast and guarantee models that will support its fast deployment.
ATIDI, a multilateral insurer headquartered in Kenya, has confirmed its support for the project through a Memorandum of Understanding (MOU) signed on 25 May 2025 (see here for the press release). Leading traders and renewable energy developers in the region have also shown an interest in this initiative.
RELP is establishing the iTrust guarantee fund in Luxembourg, a prominent financial hub, with the fund’s structure expected to be completed during 4Q 2025. AfDB and RELP will engage investors at a RELP-event in New York during Climate Week (September 2025).
“What began as a clear and ambitious vision has taken shape into a tangible and detailed value proposition, designed to meet the needs of stakeholders, including the SAPP, the lending community, and the developers. The Catalytic Floor Price Guarantee will help attract the significant investment needed for IPPs within the SAPP, enabling new Renewable Energy Capacity in Southern Africa, that might not otherwise be realised,” said Sebastian Kind, Founder and CEO, RELP.
Author: Bryan Groenendaal
