Investment firm Bravura Energy has launched a Solar Fund for the exclusive investment in solar photovoltaic (PV) projects. The fund generates income through triple net power purchase agreements (PPAs) with solar providers.
The fund is aimed at businesses that manage PPAs, including engineering, procurement and construction (EPC) companies that have conducted the feasibility studies and have projects that are expected to begin.
The fund is an opportunity for organisations that need funding for PV projects that may not be able to follow a traditional structure or project roll-out, as well as those that want a more cost-effective funding option, says Bravura structured solutions associate Rudelle Ellmann.
Traditional funding can either be through debt finance, which entails prime +1% or more, or the business can access equity funding, which typically has higher interest rates, owing to risks involved.
However, the Solar Fund provides funding for the EPC companies or solar providers at a lower rate. The EPC or solar provider is then responsible for the EPC of the equipment. The service provider will also be responsible for the operations and maintenance, cleaning and servicing of the projects after installation.
“We believe that this allows for a strong business model to develop for the business,” says Ellmann.
She adds that Bravura Energy is also open to the ownership of the assets being transferred to the solar provider after five to ten years for either cash or shares in the provider’s business.
The fund offers in-house access to specialist financial and technical experts for current and potential clients. Bravura Energy consists of a technically astute team, led by Bravura Energy MD Philip Venter.
The team has extensive knowledge and experience in project management and infrastructure implementation and can, therefore, assess and evaluate the EPC companies and any potential energy projects.
“We know that each client is unique, but so are our solutions. “We are looking forward to finding new and exciting projects that can create sustainable and profitable investments for all our stakeholders,” Venter asserts.
The fund is finalising investor details and actively pursuing viable projects. The response to the initiative has been positive, and investor interest in the fund is good, owing to the opportunity presented, Bravura structured solutions associate Jaco le Grange adds.
While the fund is not a retail financial product, it has opened the door for investors with R1-million to invest, which is traditionally considered to be a low-entry threshold for the sector, he notes.
With the launch of the Solar Fund, Bravura Energy is poised to support the development of reliable energy supplies in Africa.