MechChem Africa January-February 2025

Innovative financing models driving solar transition Candi Solar, a pioneering specialist in customised, financially attractive and risk-free solar power solutions, has recently completed an installation for BT industrial. This article highlights the benefits of Candi Solar’s innovative and risk-free Performance Linked Instalment Sale (PLIS) option.

Left: The Candi Solar and Changa Energy teams, from left: Petrus Badenhorst, Siyabonga Gumede and Wiehan Pelser from Candi Solar; Gundo Mawela and Mickey Mashale from Changa Energy; and Michelle Galloway from Candi Solar. Right: In India, Candi Solar is now ranked among the Top 5 rooftop solar developers.

S outh Africa’s ongoing energy crisis, characterised by soaring electricity prices and persistent load-shedding, has driven local businesses to ex plore sustainable and reliable alternatives. By partnering with the right solar develop ers, companies can transition seamlessly to solar energy in a financially viable way. A notable example is the recent comple tion of BT Industrial Group’s new 1.0 MW solar plant in Benoni. This project demon strates how innovative, tailored financing can eliminate the common barriers to solar adoption, ensuring reliable power, reduced electricity costs, and maximised tax benefits. The energy crisis led to operational and financial disruptions at BT Industrial, reduc ing productivity by 25%. “To protect our long-term viability, we needed to address the energy uncertainty and the increasing cost of Eskom electricity, which has risen by a compound annual growth rate of 19% over the last four years. This surge almost doubled BT Industrial’s electricity bill from R600 000 to R1 000,000, and with the slated future increases, this is projected to reach R1.2 to R1.3-million. “This is a significant cost increase, squeezing our profit margins, especially in export markets where we cannot pass on these costs to our customers,” says Kgomotso Lekola, Founder and Group MD of BT Industrial Group. To overcome this, BT Industrial needed a solution that secured energy supply certain

ty, delivered cost savings, and maximised tax benefits—all without putting undue pressure on its finances. An optimal financing model An essential criterion for BT Industrial, while choosing the right solar developer, was owning the solar asset on their balance sheet – so as to access solar tax benefits – without any upfront costs. Traditional power purchase agreement (PPA) financing is an off-balance sheet model that did not meet these needs. In addition, BT wanted to mitigate performance management risks once the solar plant was operational. After evaluating several options, they selected a solar financing model from Candi Solar, a leading solar power developer, financier and operator for the commercial and industrial sectors. BT’s Kgomotso Lekola explains: “We chose Candi Solar’s innovative model be cause it provided the best value without increasing our financial risk. Candi Solar of fered a tailored solution that met all our cri teria, including long-term energy cost cer tainty and full performance management.” Candi Solar’s innovative Performance Linked Instalment Sale (PLIS) option, an on balance sheet solar finance model, offered BT Industrial all the financial advantages of a PPA while directly benefiting from the solar tax incentive, making the transition to solar more cost-effective. “The tailored payment structures allowed us to avoid passing on a large capital outlay, ensuring

no added financial burden,” adds Richard Flamand, Co-Country Lead for Candi Solar South Africa. The solar plant, constructed by Nuvo Energy with Changa Energy as project de veloper, consists of 1 604 solar panels and seven grid-tied inverters, ensuring indepen dence from Eskom. With Eskom proposing further tariff hikes, BT Industrial’s invest ment in solar will yield significant utility cost reductions. The plant has also received approval to export excess electricity back to the grid, which will lead to even greater savings in the future. BT Industrial also prioritised a comprehen sive low-risk power solution. “Candi Solar provides full operational and performance management of the solar system, allowing our team to focus on core business activi ties,” says Lekola. “Their end-to-end solution includes everything from construction to asset maintenance, ensuring ongoing per formance and reliability,” he adds. Candi Solar’s impressive portfolio in cludes projects in South Africa such as Kings Park Stadium HQ, Schneider Electric, Pick ‘n Pay, and Toyota. The company has recently secured US$38-million in equity invest ment from Norfund, Kyuden International and STOA to fund its growth and finance an additional 200 MW of commercial and industrial solar projects. www.candi.solar Zero-risk, end-to-end solar solutions

16 ¦ MechChem Africa • January-February 2025