South Africa’s financial institutions have been instrumental in funding the bulk of the projects under the Department of Energy’s multibillion-rand Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), delegates heard at the Solar Indaba, in Sandton, on Friday.

The REIPPPP has progressed through four bidding rounds, enabling selected independent power producers to connect renewable energy projects to the country’s strained national grid, and South African financial institutions have been behind 86% of the required funding to date.

Two-thirds of the debt acquired for the qualifying bidders had emerged from commercial banks, University of Cape Town Graduate School of Business management programme in infrastructure reform and regulation director Professor Anton Eberhard said.

Discussing the REIPPPP financing to date, he told delegates attending the two-day conference that, increasingly, the REIPPPP was occupying “centre stage” in debates surrounding the incentivising of renewable projects and developing innovative financing options.

In less than three years, the programme had attracted R120-billion for 3 922 MW across 63 mostly solar and wind projects from 100 shareholders – 46 of which were involved in two or more projects.

Over 25 projects have already been connected to the grid following three bid windows.

Further, as the rounds progressed into the fourth bid window, prices for solar photovoltaic and wind had dropped 68% and 42% respectively – a trend that was expected to continue.

While the scale, profitability and success of the project was attracting international investor interest, Eberhard was “impressed” with how South African banks assumed their role within the renewables programme, rapidly learning and adapting through each round.

He was optimistic about the programme’s future, noting that prices continued to decline, financing was increasingly becoming more innovative and competition had remained steady.