GuarantCo and BII Guarantee $100 Million Deal to Unlock $500 Million in Renewable Energy for South Africa

GuarantCo, a part of the Private Infrastructure Development Group (PIDG), and British International Investment (BII), the UK’s development finance institution, have collaborated to catalyze up to $500 million in renewable energy projects in South Africa. The $100 million guarantee facility, split evenly between the two institutions, supports Etana Energy, a South African energy trading company, in its efforts to expand renewable energy capacity under the country’s largest “energy wheeling framework” transaction.

This initiative is designed to provide independent power producers (IPPs) with the revenue assurance needed to advance new renewable energy projects. This innovative model is expected to deliver approximately 500 megawatts (MW) of new wind and solar power, displacing fossil fuel-based electricity generation and preventing an estimated 1.2 million tons of CO2-equivalent emissions annually. The deal aligns with South Africa’s Just Energy Transition Partnership (JETP), a multi-government initiative aimed at accelerating the country’s transition to greener energy.

Etana Energy, which has founding shareholders such as H1 Holdings, a black-owned South African investment firm, and Chariot Limited, a UK-listed company focused on transitional energy projects in Africa, will play a pivotal role in aggregating and distributing electricity generated by private renewable energy producers. Utilizing recent regulatory changes in South Africa, Etana plans to sell this renewable energy to commercial customers by “wheeling” electricity through the existing national transmission network.

Iain Macaulay, Director and Head of Project Finance for Africa at BII, emphasized the innovative nature of the financing model, stating, “BII is demonstrating global leadership in unlocking private capital for climate finance. The Etana deal is a truly innovative form of financing that I hope will serve as a template for unlocking South Africa’s green energy potential.”

Evan Rice, CEO of Etana Energy, underscored the urgency of the initiative, saying, “Local businesses need low-carbon, cost-competitive electricity to remain relevant and viable. Etana’s aggregation model provides a way to meet these needs while enabling new renewable energy capacity to be built. This guarantee facility is a critical piece of the puzzle for a relatively new company like Etana to be a bankable offtaker for IPPs. We are incredibly grateful to GuarantCo and BII for their vision, support, and commitment to catalyzing this opportunity with us.”

The deal marks GuarantCo’s first contribution to the JETP program and underscores its mission to support transformative infrastructure projects. Surabhi Mathur Visser, Deputy CEO of GuarantCo, highlighted the replicability of the model, stating, “From an investment perspective, it provides strong replication opportunities by proving to the market that a guarantee framework can operate at scale. GuarantCo continues to seek potential market transformation transactions like this in lower-income communities to deliver against the UN’s Sustainable Development Goals in alignment with the PIDG 2030 strategy.”

Construction on the renewable energy projects enabled by the framework is expected to commence soon, significantly bolstering South Africa’s green energy transition. This collaboration highlights the important role of innovative financing solutions in addressing Africa’s renewable energy deficit and promoting sustainable economic growth.