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- R4bn Tronox deal funds two 100MW solar plants
- Billions to help Redefine build green properties
- Harmony pursues green goals with R10 billion loan
- Cold solutions finance for cold storage facilities
- International Finance Corporation green bond fund
- Envusa energy deal: The way for renewable energy
- Paladin Energy senior debt funding partnership
- Renewable energy wind farm financing
- Stor-Age’s successful inaugural bond auction
- R4bn Tronox deal funds two 100MW solar plants
- Billions to help Redefine build green properties
- Harmony pursues green goals with R10 billion loan
- Cold solutions finance for cold storage facilities
- International Finance Corporation green bond fund
- Envusa energy deal: The way for renewable energy
- Paladin Energy senior debt funding partnership
- Renewable energy wind farm financing
- Stor-Age’s successful inaugural bond auction
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- Africa's pathway to a climate-resilient economy
- Commercial property trends 2022
- Green energy in the developing world | Nedbank CIB
- How sustainable finance creates value
- How the property sector recovered in 2023
- Two wins for sustainable finance leadership | Nedbank CIB
- FURTHER IMPACT empowerment for entrepreneurs
- There's a new buoyancy around water and sanitation
- What happens when finance meets sustainability?
- Africa’s renewable-energy projects
- Breaking barriers for energy transition in mining
- Africa's pathway to a climate-resilient economy
- Commercial property trends 2022
- Green energy in the developing world | Nedbank CIB
- How sustainable finance creates value
- How the property sector recovered in 2023
- Two wins for sustainable finance leadership | Nedbank CIB
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- There's a new buoyancy around water and sanitation
- What happens when finance meets sustainability?
- Africa’s renewable-energy projects
- Breaking barriers for energy transition in mining
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- COP 28 | Nedbank CIB
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- SARB: Shifting to a 25 bps hike, from 50 bps
- SARB MPC: Repo unchanged but still hawkish
- Bonds, the monetary surprise and fiscal dominance
- Upside for bond investments has compressed
- The "weak China trade" on the rand exchange rate
- Dovish inflation surprises and fiscal constraints
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- SARB: Shifting to a 25 bps hike, from 50 bps
- SARB MPC: Repo unchanged but still hawkish
- Bonds, the monetary surprise and fiscal dominance
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Breaking down barriers for energy transition in mining
Breaking down barriers for energy transition in mining
Avania Moosa – Principal: Mining and Resources
Posted 22/05/2024 Updated 23/07/2024 2 mins
The African mining sector, one of the most energy-intensive sectors in the world and arguably the largest contributor to global warming, has the responsibility as well as the opportunity to incorporate renewable energy into its energy mix. However, several barriers have to be addressed to make this transition a reality. Until recently, incorporating renewable-energy sources into a mining operation was not a viable option: the cost of building a solar-powered plant was exorbitant and the reliability of supply was a significant concern.
However, the renewable-energy space has evolved rapidly – technological advancement aided by the drastic drop in prices of solar panels and batteries over the past 10 years have given mining companies the confidence to adopt solar photovoltaic (PV) technology and, more recently, large-scale battery storage in their operations.
Consequently, more mining companies in Africa and around the world are transitioning to renewable energy. They are taking advantage of the benefits that these technologies provide, including reduced operational costs, increased energy reliability, price security (hedging against long-term energy prices), and reduced emissions and environmental impact, which assist in meeting environmental, social, and governance (ESG) goals.
In South Africa, the regulatory environment has matured to allow for the adoption of renewable-energy technologies. It is now possible for mining companies to get a significant percentage of their electricity from renewable-energy sources (up to 50% – 80% if both wind and PV technologies are deployed), either on-site or wheeled through the electricity network, at a lower cost than when energy is supplied by the grid. Mining companies do not have to fund the capital costs of these renewable-energy projects, as many reputable independent power producers are now able to fund the projects and sell electricity to the mines via a power purchase agreement (PPA). The key commercial terms of a PPA that ensure bankability include:
- the take-or-pay provision;
- protection for the developer against changes in the law;
- compensation on termination to keep the developer whole for offtaker defaults; and
- a provision that leaves the grid risk with the offtaker.
In conclusion, the multiple barriers to adopting renewable energy in the African mining sector can be overcome with the right investments, partnerships, regulatory support and bank financings. Nedbank Corporate and Investment Banking is well positioned to work together with mining companies to define the best technical solution and the most appropriate legal and financial structuring to ensure the bankability of their renewable-energy projects. We look forward to embarking on the journey with you.
Related posts
See allAccelerating and scaling Africa’s renewable-energy projects
In Africa more than 600 million people lack access to electricity. At the current pace of electrification millions of Africans are still expected to be without electricity in 2030 unless the pace of electrification is trebled, by connecting more than 90 million people a year. Beyond electrification, African countries should also focus on reducing gaps in access to electricity between urban and rural areas through expanding the electrical grid.
By Hlatse Nkune
Published 22 Aug 2024 in nedbank:cib/articles/energy
Accelerating and scaling Africa’s renewable-energy projects
In Africa more than 600 million people lack access to electricity. At the current pace of electrification millions of Africans are still expected to be without electricity in 2030 unless the pace of electrification is trebled, by connecting more than 90 million people a year. Beyond electrification, African countries should also focus on reducing gaps in access to electricity between urban and rural areas through expanding the electrical grid.
Hlatse Nkune
Published 22 Aug 2024
What happens when finance meets sustainability?
Find out at the 25th edition of the Africa Energy Forum (AEF), which will be held in Nairobi, Kenya, from 20 to 23 June 2023. During the event Nedbank CIB will collaborate with other energy sector experts, regulators, utilities, developers, and institutions to identify crucial opportunities that will drive the industry forward.
By Staff writer
Published 23 Jul 2024 in nedbank:cib/articles/sustainability
What happens when finance meets sustainability?
Find out at the 25th edition of the Africa Energy Forum (AEF), which will be held in Nairobi, Kenya, from 20 to 23 June 2023. During the event Nedbank CIB will collaborate with other energy sector experts, regulators, utilities, developers, and institutions to identify crucial opportunities that will drive the industry forward.
Staff writer
Published 23 Jul 2024