Environmental Finance's Sustainable Debt Awards 2024

Award for innovation - loan use of proceeds: Msenge Emoyeni Wind Farm

The loan for the Msenge Emoyeni Wind Farm in South Africa has secured the award for its ground-breaking role as the first renewable energy project to be directly linked to a 'green' hydrogen facility.

The syndicated loan transaction was praised for its innovative direct link to a green hydrogen project developed by the South African oil and gas firm Sasol. The transaction was also highlighted as an important milestone in green hydrogen technology application and a path to scalability.

David JonesRand Merchant Bank (RMB) – as sole mandated lead arranger of the Msenge loan – said the deal was a key step in the development of the green hydrogen industry in South Africa.

"The loan facilities were structured on a long-term basis and in such a way so as to achieve an energy tariff that is comparable what has historically been achieved by wind projects in South Africa's Renewable Independent Power Producer Programme (REIPPP)," said David Jones, senior transactor at RMB. "This result is fundamental to proving the commercial viability of 'green' hydrogen production from renewable energy".

In addition, RMB said the syndication of the loan was critical for the development of a funding market for such green hydrogen-linked renewable deals, given expectations of more deals in the future.

The 69MW Msenge project will supply renewable energy to Sasol through a 20-year power purchase agreement (PPA) to supply 'green' hydrogen production at its Sasolburg site.

Msenge is owned by an investor consortium of South African financial services Old Mutual's affiliates African Clean Energy Developments, IDEAS Fund and Reatile Renewables, and is expected to be operational by the end of the second quarter of 2024.