In a first-ever guarantee collaboration with the French development finance institution Proparco, Standard Bank has assembled an innovative local funding structure for the construction of a R950-million, 45 MW solar PV plant in Namibia. Since the project did not benefit from a government guarantee, there was no political risk protection in the power purchase agreement between NamPower (the Namibian power utility) and Alten Hardap, the independent power producer (IPP) and sponsor developing the plant. In response, the bank worked with Proparco, to build a hybrid guarantee structure. The bank’s strong in-country balance sheet and presence enabled development finance institution to take on the credit risk in local currency, effectively reducing the bank’s own project exposure from 15 to the first eight years of the project. This removed the cost of additional political risk insurance.
Contact Hayley Crane, Standard Bank, Tel 083 795 7422, firstname.lastname@example.org
Source: EE plublishers