Sonnedix South Africa
On April 20, 2023, MIGA has issued guarantees to Okavango Biology Luxembourg S.à r.l. (the “Guarantee Holder”) for up to $18.9 million to cover its equity investments into Mulilo BTE Prieska PV (RF) (Pty) Ltd (“MBP”). MBP is a 75 MW solar power plant in the Northern Cape province of South Africa. MBP is part of Round 3 of the Renewable Energy Independent Power Producer Program (REIPPP) and has been operating since 2016. The Guarantee Holder has acquired MBP Solar Holdings (Pty) Ltd (formerly known as Sonnedix Solar South Africa Holdings (Pty) Ltd) of South Africa, which has a 60 percent ownership interest in MBP. The 15-year guarantees protect BTE Renewables against the risk of breach of contract.
The project is a categorized as B under MIGA’s Policy on Environmental and Social Sustainability. Click here for the Project’s Environmental and Social Review Summary.
South Africa has made substantial progress toward achieving universal access to electricity, however, still faces chronic power shortages with frequent load shedding, which result in negative impacts on the overall industrialization and macroeconomic development of the country. To address the country’s energy needs, the government of South Africa has initiated several programs to increase generation capacity and narrow the electricity supply and demand gap. One such initiative, the REIPPP has enabled significant additional renewable energy capacity. Continuing significant private sector investments in the power sector will be required to achieve the government’s goals. By supporting the project, MIGA is facilitating a private investment that will contribute to the financial sustainability of the power sector and demonstrate the value in the secondary market of solar power plants in South Africa.
The power sector is a significant contributor to GHG emissions in South Africa, due to the dominance of coal generation, with limited renewable energy generation (less than 10 percent). As a solar power plant, MBP delivers net positive impacts on the environment and has strong climate change mitigation aspects. The acquisition will ensure that it maintains an acceptable level of performance via its environmental benefits. By supporting the project, MIGA is supporting a low-carbon and climate resilient development pathway for South Africa.