The challenge
RMB’s Infrastructure Finance team was approached by Stanlib’s Infrastructure Private Equity Fund (Stanlib) and Built Africa Holdings (BAH), a Black Economic Empowerment (BEE) shareholder in the REISA Solar PV Project (the Project) closed under Round 1 of the South African Renewable Energy Independent Power Producer Programme (REIPPPP) to upfront a portion of BAH’s future cash flows over the remaining life of the Project.
The RMB solution
RMB facilitated the transaction by providing a R235m preference share facility, which will result in BAH receiving that amount upfront, while still retaining a 25% shareholding in the underlying Project.
Client benefits
This transaction facilitated the monetisation of a BEE shareholder in one of the early round REIPPPP projects. Having been a shareholder since financial close of the project, and having remained so as the project moved from construction into the operations phase and de-risked, BAH felt this was the right time to monetise its investment in order to pursue further opportunities in the sector and beyond.
BAH wanted to sell a portion of the economics associated with that shareholding, without diluting its shareholding or voting rights at the Project Company level. The structure of the financing, through preference shares, facilitated both objectives. In addition, the existing funding, provided by Stanlib, needed to remain in place, and therefore innovative structuring was required to maintain that funding.
The transaction not only delivers for Stanlib, a key player in the local renewables sector, but also facilitates the monetisation of a portion of the value held by the BEE party, BAH, in its renewable energy asset, so as to enable further investment in future opportunities.
| Client |
Built Africa Kathu |
|---|---|
| Deal value | R235-million |
| Sector | Renewable energy, BEE |
| Capability | Infrastructure funding and preference shares |
| Role | Sole arranger, structurer and preference share funder |
| Country | South Africa |
