Revealed: how to close an energy deal in South Africa

Author: Gemma Varriale | Published: 10 Dec 2012

The approval last month of South Africa’s first large-scale renewable projects establishes a roadmap for the completion of energy deals in the country. Here the deals’ counsel outline the key precedents set.

The South African government selected 28 wind and solar projects to make up the first round of deals under the South African Renewables initiative (SARi).

The contracts, which have a combined value of $5.4 billion (£3.4. billion), represent the first stage of the government’s plan to reduce reliance on coal-fired plants and boost employment.

Wildu du Plessis co-managing partner of Baker & McKenzie’s Johannesburg office said South Africa previously lacked independent private sector power generators and that presented the most challenging aspect of the deals. “This meant the legal construct was completely different to any other South African financing,” he said.

Although the financing followed typical principles...