Standard Bank’s plan to help companies kiss Eskom goodbye

Standard Bank, Stanlib, and Scatec have combined to create a private energy platform in South Africa called Lyra Energy, which plans to help companies reduce their reliance on Eskom and contribute to the end of load-shedding. 

The aim is to create a low-risk private energy platform that can service parts of the market that are getting inadequate service from Eskom or no service at all. 

The spokesperson for infrastructure investment at Stanlib, Andy Louw, told 702 that while there are similar structures out there, the aim is to improve on what is already in the market.

Lyra Energy will offer distributed access to “affordable and predictable utility-scale renewable energy” to this “previously unserved segment of commercial and industrial energy users”.

Discovery, for example, launched a renewable energy platform called Discovery Green, which aims to connect businesses with renewable energy generation. 

The service has already been offered to select partners, including Woolworths, Sun International, Virgin Active, Planet Fitness, Clicks, and Life Healthcare. 

Discovery has also partnered with RMB as an investment banking partner to provide advice and funding. 

Two products were launched – Green Saver and Green Guarantee – which offer varying degrees of renewable coverage of electricity consumption. 

As with Discovery Green, Lyra Energy plans to transfer renewable energy through virtual wheeling agreements with Eskom to corporates who require it. 

However, Louw said Lyra Energy is unique in that it combines financing with a utility-scale renewable energy developer in-house. 

Stanlib has already invested in more than 20 utility-scale renewable energy projects in South Africa, and Scatec has close to 1,000 MW of renewable generation capacity in the country. 

Lyra Energy plans to build, own, and operate multiple renewable energy projects and sell the electricity generated via Eskom’s grid to companies around South Africa. 

The renewable energy offering will not only help businesses save on energy costs and be immune from load-shedding but also cut the emissions associated with their electricity usage. 

“Customers can expect increasing savings over time – especially if standard Eskom tariffs, which have risen by an average of about 14% annually over the past four years, continue to outpace inflation,” the partners said.

Companies will be able to get power purchase agreements of between five and 20 years, and pricing will be at a material discount to reference pricing from Eskom.

Projects with available grid capacity have been secured for the platform, and construction of an initial 200 MW facility is expected to start later in 2024.

Standard Bank and Stanlib will help mobilise capital to fund the generation projects for the new platform. 

This is part of Standard Bank’s aim to fund a total of R300 billion in sustainable financing solutions mobilised by 2026. 

This is not limited to loans and advances, with the bank also looking to expand its underwriting portfolio and arranging activities in South Africa undertaken on behalf of clients. 

As part of the R300 billion in sustainable financing solutions, Standard Bank aims to finance R50 billion worth of renewable energy power plants and underwrite R15 billion in renewable energy commitments by 2024.  

The bank set an initial target of financing R55 billion worth of renewable energy projects in Africa within two years from 2021. This target was reached in less than one year.