CAPE TOWN — The Chinese use two brush strokes to write the word ‘crisis’. One brush stroke stands for danger; the other for opportunity – which can be elegantly applied to Eskom’s dysfunction right now. In yet another injection of life-giving hope to the endangered and corruption-traumatised national psyche, the Development Bank of Southern Africa, is investing big-time in renewable energy projects, the aim being to have imbedded “green” energy contributing 11.5% of total renewable energy capacity by 2030. The DBSA $200m shot-in-the-arm to the Embedded Generation Investment Program, involves helping 10 proof of concept projects more easily attract commercial financing. We’ve seen how powerful a force for societal good and course-correction banks in South Africa can be (if only to protect themselves), first by closing down the Gupta’s accounts and then the Watsons. Some of the big banks are refusing to finance coal-fired power plants, helping bring South Africa kicking and screaming into globally-accepted diversified sources of generation. Increasingly it seems, the nightmare is ending, even if we had to first wake up and smell the dimly-lit open cesspit. – Chris Bateman

By Roxanne Henderson

(Bloomberg) – South Africa’s state-owned Development Bank of Southern Africa is funding a program intended to give renewable energy projects in the electricity-starved country a boost by making them more appealing to commercial banks.

The financier will funnel $200m into the Embedded Generation Investment Program to kick start developments that will add 330 megawatts of new generating capacity to the national grid and reduce carbon emissions. Half of the funding will be provided by the Green Climate Fund, the Johannesburg-based financier said in an emailed statement.

While the DBSA’s investments will get initiatives off the ground, the goal is to create projects that commercial lenders will want to fund to completion, said Mohale Rakgate, the group executive responsible for project preparation. The projects will need to attract at least $104m more from local banks in their initial phases, he said.

“We have a pipeline of more than 10 projects,” Rakgate said. “We want to take the first steps, prove the concepts work” and get commercial financing, he said, adding that “attracting private funding is really at the core of what we are doing.”

​Global trend
South Africa aims to have embedded generation contribute 2,600 megawatts to the country’s renewable energy capacity, representing an 11.5% slice, by 2030 and is rekindling enthusiasm for green alternatives to keep the nation’s lights on. The country’s debt-laden utility Eskom Holdings SOC Ltd. has been forced to cut power in recent weeks as it cannot afford to maintain its coal-fired plants.

“This is in line with a global trend that has been happening in the US and Europe. South Africa is just catching up on the renewable trend of how power is now generated by diversifying sources of generation,” Rakgate said.

Nedbank Group Ltd. is already shunning coal-fired projects, with the Johannesburg-based lender saying last month it will no longer provide project financing or other forms of asset-specific financing where the proceeds will be used to develop plants using the fuel, regardless of the country or technology.

The DBSA will launch the program after the country’s revised Integrated Resource Plan is approved by the government and will also allocate some of the funding to black empowerment schemes, it said.

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The Nordic Environment Finance Corporation NEFCO and Swedish International Development Cooperation Agency (Sida) have today signed an agreement to cooperate on expanding off-grid electricity solutions in sub-Saharan African countries. The purpose of this new and major expansion, the Beyond the Grid Fund for Africa (BGFA) is to incentivise the private sector to provide affordable and clean, high-quality off-grid energy services to people living in rural and peri-urban areas in Burkina Faso, Liberia, Mozambique and Zambia. The programme, implemented together with the Renewable Energy and Energy Efficiency Partnership (REEEP), supports the United Nations’ Sustainable Development Goals and the Paris Agreement.

Over 600 million people in sub-Saharan Africa live today without access to electricity. For most of these people, connection to the grid is not likely to happen for decades, or longer. So far, no country has been able to bridge the poverty gap without access to electricity.

The Beyond the Grid Fund for Africa aims to reduce this gap by stimulating and accelerating the emergence of new business models for provision of affordable energy access at scale whilst demonstrating sustainability over time. The programme forms part of the ‘Power Africa’ initiative launched by former President Barack Obama and contributes to the Sustainable Development Goal 7 and the Paris Agreement.

The programme builds on the positive experiences of the Beyond the Grid Fund for Zambia (BGFZ), which Sweden commenced in 2016. Sweden will contribute an initial SEK 500 million (approx. EUR 48 million) to the expansion and is through the cooperation with NEFCO looking to attract other like-minded donors with the aim to convert the Beyond the Grid Fund for Africa into a multi-donor programme over time. NEFCO will manage the new facility and the programme will be implemented in collaboration with REEEP, an expert organisation who has been instrumental to the early success of the Beyond the Grid Fund for Zambia.

“NEFCO is accredited by the EU and the Green Climate Fund and is an experienced fund manager, which is already managing several trust funds for Sida,” says Anders Arvidson, Project Leader for Beyond the Grid Fund for Africa at Sida. “We share the same values as regards environmental, social and gender aspects. Additionally, NEFCO can provide the highest level of fiduciary requirements related to reporting, auditing and anti-corruption.”

Magnus Rystedt, Managing Director at NEFCO sees great potential for small and medium-sized businesses in the programme: “We are very happy for this opportunity to make use of our considerable experience in setting up and administrating multi-donor instruments and create new, innovative green growth financing opportunities for small-and medium sized private energy companies.” 

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Solar-generation microleasing platform Sun Exchange on Tuesday announced that it had signed an agreement with Johannesburg-based boutique clean energy fund manager Decentral Energy, said Sun Exchange founder and CEO Abe Cambridge.

The agreement gives Decentral’s Grovest Energy, an Income Tax Act Section 12J fund, first right of refusal to fund 51% to 100% of selected Sun Exchange offtaker projects, as well as to fund any balances after Sun Exchange solar cell crowd-sales are completed.

Decentral provided equity and debt financing for the 473 kW rooftop solar plant for plastics recycling company Nioro Plastics, in Cape Town. The project, which came on line in January, is the largest Sun Exchange project to date, Cambridge pointed out.

The fund manager also bought nearly 59% of the Nioro Plastics solar cells, which will yield an internal rate of return of 14.5% a year. Over 20 years, Nioro Plastics will produce 14.12 GWh of clean electricity, which is equivalent to over 10 000 t of coal burned.

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​“We invest in small-scale energy assets that demonstrate predictable, inflation-linked cash flows, because we believe that the energy future will be decentralised and built upon similar financing systems,” said Decentral fund manager Christian Bode.

“For that reason, we support Sun Exchange in its vision to create a thriving, inclusive and decentralised solar-powered economy. We are so confident about its business model that we have already bought into the Nioro Plastics project, and our goal is to fund 20 MW of Sun Exchange projects by 2020.”
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South Africa is set to received US $80m loan from German development bank KfW and the Industrial Development Corporation of South Africa (IDC) to develop green economy projects across the country.

KfW executive board member Dr Stefan Peiß who was in attendance to sign the agreement together with newly appointed IDC CEO TP Nchocho, said that the loan facility dubbed the South African facility for Green Growth (SAFGG), is earmarked for local entities to invest in green economy projects that will have a beneficial impact on environment protection and resource efficiency with regard to water resource protection and conservation.

“The facility will also enable local entities to access funding to invest in the green economy, the result of which will be to help mitigate the impact of carbon dioxide emissions” said Dr Stefan Peiß.

“The loan facility from KfW would significantly boost the IDC’s objectives of increasing its investment in renewable energy initiatives and infrastructure related projects. Most importantly, KfW’s support has largely helped us to meet our developmental mandate especially regarding supporting the growth of local [small and medium-sized enterprises] in various sectors of the economy, including agriculture, light manufacturing and tourism,” Nchocho,” CEO TP Nchocho added.Peiß also commended the IDC for its role in providing funding to small and medium-sized companies that were harnessing opportunities in the green economy.

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FirstRand Bank has joined the exodus of local banks that were funding new coal-fired power plants in South Africa, and in particular the Thabametsi and Khanyisa independent power producer (IPP) projects.
These two projects are included in the draft integrated resource plan for electricity, Draft IRP 2018, for completion in 2023 and 2024. The IRP is due to be presented to the cabinet for final approval in February 2019, according to the South Africa minister of energy, Hon. Jeff Radebe.

The 557 MW Thabametsi project and 306 MW Khanyisa project were announced as the successful bidders in October 2016, in the first bid window of the Department of Energy’s new-coal IPP programme, following a request for proposals in December 2014.

​The projects have still not achieved financial close, and in addition to funding difficulties, their environmental authorisations, atmospheric emission licences, water-use licences and generation licences are either outstanding or being challenged in various fora, including the high court.

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Nedbank lived up to its slogan as the “green” bank in a decision to withdraw its funding of two proposed new coal-fired power stations in South Africa, Thabametsi and Khanyisa.
This decision fits with the banking group’s commitment to “green” funding, responsible lending and supporting sustainability initiatives. The bank says its initial proposal for funding the construction of the Thabametsi and Khanyisa independent power producers (IPPs) has lapsed and will not be renewed.

This follows a corporate policy announced in early 2018 that the bank would no longer fund the construction of any new coal-fired power plants beyond its existing commitments to fund Thabametsi and Khanyisa, which were included as part of the new coal IPP programme in the South African Department of Energy’s draft integrated resource plan for electricity, Draft IRP 2018.

The proposed Thabametsi 557 MW coal-fired power station, which would be largely owned by Japan’s Marubeni and South Korea’s Kepco, was planned to be built near Lephalale in Limpopo, while the Khanyisa 306 MW power station was to be sited near eMalahleni in Mpumalanga. The biggest shareholder of Khanyisa would be Saudi-owned Acwa Power.
Nedbank says that it would prefer to offer financing for projects in energy efficiency and renewable energy, such as landfill gas, solar, hydro and wind projects. The bank says in its core business of lending and investing, it has a crucial role to play in transforming the economy and addressing climate change and that it seeks to “use [its] financial expertise to do good for individuals, businesses and society.”

Nedbank’s announcement follows reports in September 2018 of Standard Bank’s withdrawal of financing the construction of coal-fired power. Currently, it appears that FirstRand, ABSA and the Development Bank of South Africa (DBSA) are still willing to offer funding for the Thabametsi and Khanyisa projects, but this may change. Nedbank and Standard Bank have followed the global trend of financial institutions refusing to fund the construction new coal-fired power plants.
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Inspired Evolution has successfully secured a further USD35 million in commitments from the African Development Bank (AfDB) and Swedfund International AB (Swedfund) in a second closing of its Evolution II Fund. Growing investor confidence in Inspired Evolution’s offering, consolidates its market position as one of sub-Saharan Africa’s leading specialised clean energy and resource efficiency investment advisory businesses.

Managing Partner, Wayne Keast, said that he was pleased with these additional investor commitments towards Evolution II’s imminent second closing. Keast confirmed that the fund’s investors comprise a mix of strategic international DFIs, specialised fund-of-funds, and a family office. Institutional investors are also looking at commitments to the fund in 2018.

The Vice President for Power, Energy, Climate and Green Growth Complex of the African Development Bank (AfDB), Amadou Hott, emphasized AfDB’s commitment to boost its investment in renewable energy projects, evidenced by the increase of the share of renewable energy project as a portion of AfDB’s portfolio of power generation from 15% in 2007-2011 to 75% in 2012-2017. The Bank’s USD20 million investment into Evolution II will contribute to meeting the renewable energy targets of the Nationally Determined Contributions (NDC) of the Bank’s regional member countries.

Maria Håkansson, CEO of Swedfund, the Swedish state-owned development finance institution, emphasized that financing sustainable energy in developing markets is one of Swedfund’s key priorities in its investment strategy, and that Swedfund’s USD15 million commitment to Evolution II fits well within Swedfund’s mandate.

Evolution II is a specialised clean energy infrastructure and resource efficiency growth fund active across sub-Saharan African which achieved its first closing in March 2017 at USD89.5 million. Evolution II is targeting USD250 million for a final closing by end September 2018. Evolution II invests in affordable, least-cost, low-carbon clean energy infrastructure projects and promotes growth in resource efficiency technologies, products and businesses. Evolution II’s measurable positive impacts will improve energy access and reduce industry footprint, contributing to a brighter future for sub-Saharan Africa’s people.

“We welcome our new investor partners onboard the Inspired Evolution platform. We are delighted with the further support and recognition given by the market to Inspired Evolution’s goal, mission and performance,” said Matty Vengerik, CEO of Quantum Power, the fund’s seed investor and one of its cornerstone investors with operations across Africa.

​​I adore creative people. But sometimes, inventors can be too smart for their own good.
Approximately 98% of patents make zero income. The track record of inventors in business is not very impressive. I have come to conclude that no matter how valuable inventors think their inventions are worth, until they are making money, they have little value. It all comes down to one thing - EXECUTION.
Mark November
President & Founder
PEACE Licensing International
www.peacelicensing.com

From experience, I have learned that when we invested money in the wrong teams, no matter how good the invention was, the teams failed. Contrast that to recent successes and it's plain to see the differences. The teams with smart strategies that can execute, succeed. The teams that can't execute, fail, even if they have smart strategies. Execution is everything.

To all my inventor friends, please do not take this as an insult - You probably were never meant to run a company. Companies that are structured around the inventor or models that the inventor has the final say, seem to fail the most. Companies succeed that are structured around a seasoned team of professional business people who know how to execute, with great intellectual property (IP) imbedded, and are timed right for the market.

Inventors need to think differently if they want to create income for their patents and be in the rare 1% -2% of patent owners that actually make money. They need to put their business into the hands of professional business people who know how to execute. Or they need to license their invention to companies that can execute.

Inventors ask me all the time, can I raise them money. Here is the truth...other than family and friends, big investors only hand their money to people who have previously demonstrated the skills and track records of successfully running a business and managing other people's money. They do not care that your invention makes golden eggs and will make them 100x richer. They want to hand their money to people who have proven track records. Unless your team has all the right people with the right track records, you are wasting your time looking for funds. You need to spend your time finding the right people to join your team.

It's all about team. And I am not referring only to the chemistry. You may think your team is fantastic because you like and feel comfortable with them all, but if the team is not making progress in 3-6 months, you have the wrong team.

It's never about the money. If you have the right team, right plan and the market pathway is clear, money is not a problem. There is lots of money looking for the right companies to fund. There is a lack of good teams surrounding great IP. There are more bad teams surrounding great IP than good teams. The investors see a lot of deals. They can spot the good teams from the bad. The first pages investors read in a Business Plan after the technology summary is the Team profiles.

I recently started PEACE (www.peacelicensing.com) with amazingly talented people that have super successful track records in their fields. PEACE is putting the right teams into business models with great IP, developing the right plans, and then executing. Execution is everything!

I have a lot of inventor experiences to share. This article might be the first of many.

German government-owned KfW Development Bank and Rand Merchant Bank (RMB) on Thursday signed an agreement that establishes South Africa’s first specialised debt fund vehicle for small-scale renewables projects.

Known as the Facility for Investment in Renewable Small Transactions (First), this independent, special purpose facility will make finance available for small-scale renewable energy projects that have found it challenging to access affordable funding from commercial investors.
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These include both traditional standalone, utility-style projects, as well as corporate and industrial projects.

RMB has committed R1-billion in senior debt to the fund for first close. The fund is in the market to raise an additional R700-million in the coming year, with growing interest from other banks and lenders who seek to enter this fast-growing market.

The German government, through KfW, is providing R350-million in first close financing that will mitigate the risk that had, up until now, kept many lenders from venturing into the small-scale renewable energy space.

It will also provide a further R80-million in grant funding for a technical assistance facility.

According to German Embassy head of cooperation Volker Oel, the joint venture forms an integral part of German–South African cooperation in the field of promoting a green economy.

“A greener South Africa needs a stable political environment, courageous investors, as well as public–private partnerships to mobilise local resources. With its innovative approach, the facility will further stimulate investment in the renewables space and can also serve as a model beyond South Africa,” he said.

Initially designed to provide senior and mezzanine debt finance exclusively to projects under the South African Department of Energy’s (DoE’s) Small Project Independent Power Producer Programme, which were unable to access funding from traditional commercial sources, First’s mandate is now considerably broader in response to changes to the DoE’s renewable energy commitments and policies.

Based on an expected loan portfolio of R2-billion, First’s portfolio should include between 20 and 25 utility-style projects spread across solar photovoltaic, wind, biomass and small-scale hydro, with clients coming from the South African corporate and industrial sector, as well as municipalities.

Individual loans provided by the fund are expected to be between R50-million and R300-million.

The first loan is expected to be concluded within the next six months.

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The Centre for Export Development and SAAEA is inviting companies to be part of Export Development Programme 2017 in order to grow their business by unlocking export market. The Department of Trade and Industry is offering companies opportunity to exhibit in 2018 at Italy, Nigeria, Zambia and the US, as part of the Government's support to Develop new export markets, Stimulate job creation and Broaden the export base.

If your Company is in the Renewable Energy, Agricultural, Mining, and water and waste sector and you are interested in getting new business deals in any of these countries, then you need to contact us now;

These Markets are great opportunity for South African companies to promote their products, technologies and services to international Buyers.

The Coordinator will assist you with applications and the Chairman of SAAEA will lead the delegation with financial support from the DTI; which covers cost of travel, accommodation, transport of samples, exhibition costs, training, and promotional/publicity material.

Required documents to be submitted with the application.

1.  Complete Emerging exporters' application form
2.  Have a copy of the exporter registration certificate from Customs and Excise (We can assist)
3.  Proof of registration of the entity if it is a CC or (Pty) Ltd
4.  A full colour product brochure or photographs of the products to be exhibited
5.  Audited financial statements or bank statements for the last three months.
7. Copy of a valid passport of the proposed traveller
8. Original valid tax clearance certificate
9. Company Profile.

Please contact us today to be part of this opportunity