MEGAPOWER Solar — Funding Requirement & Exit
The ZAR 1.85 billion funding requirement, the debt and equity capital structure, the use of proceeds, and the exit pathways and indicative investor returns.
Section 10 · Business Plan
Funding Requirement & Exit
The ZAR 1.85 billion funding requirement, the debt and equity capital structure, the use of proceeds, and the exit pathways and indicative investor returns.
10.1 Funding Ask
MEGAPOWER is currently raising the equity and senior-debt capital
required to bring the 100 MW project to financial close in Q1-2027 and
to Commercial Operations Date in Q4-2028. The full capital ask is
summarised below.
10.2 Investor Profile Sought
MEGAPOWER welcomes engagement from the following capital
providers:
- South African DFIs and commercial banks. DBSA,
IDC, Standard Bank, ABSA, Nedbank and Investec — for senior debt,
traditional 12-15 year tenor, ZAR-denominated, sculpted
amortisation. - International climate-finance partners. Green
Climate Fund, AfDB SEFA, IFC, Climate Finance Partnerships, KfW
IPEX-Bank, BIO, FMO and Norfund — for concessional senior or mezzanine,
longer tenors, USD or ZAR. - Infrastructure and growth-equity partners.
Pan-African or global infrastructure-equity sponsors looking for direct
primary exposure to South African renewable assets. - South African pension funds. Either through
direct co-investment or through Section 12J / infrastructure-allocation
vehicles. - Strategic offtaker investors. Mining, industrial
or hyperscale offtakers may participate at the equity layer in exchange
for preferential PPA terms (subject to ring-fencing
constraints).
10.3 Indicative Investment Terms (Equity)
| Term | Provision |
|---|---|
| Instrument | Ordinary equity (or convertible preference) |
| Pre-money valuation | ZAR 950 m (post-EIA, pre-financial close) |
| Target equity raise | ZAR 333 m sponsor equity + ZAR 92 m mezzanine |
| Holding vehicle | MEGAPOWER Solar Power (Pty) Ltd (SPV) |
| Information rights | Quarterly financial reporting, monthly during construction |
| Board representation | 1 board seat per ≥ 10% equity holder |
| Exit / liquidity | Distributions from Y6; portfolio refinancing or sale Y8-Y12 |
| Pre-emption / ROFR | Standard pre-emption on transfers |
| Lock-up | 5 years (subject to standard exemptions) |
10.4 Indicative Senior Debt Terms
| Term | Provision |
|---|---|
| Facility size | Up to ZAR 1,295 m (70% of project capex) |
| Tenor | 15 years (door-to-door); 13.5 years post-availability |
| Pricing | JIBAR + ~250-300 bps (≈ 12% all-in nominal) |
| Amortisation | Sculpted to maintain min DSCR ≥ 1.30x |
| Security | First-ranking project security; share pledge; assignment of contracts |
| Covenants | DSCR ≥ 1.20x trigger; LLCR ≥ 1.40x; CFADS sweep > 1.45x |
| Reserves | DSRA = 6 months debt service; MMRA per O&M plan |
| Hedging | Mandatory IRS on ≥ 75% of senior debt; FX hedge of capex |
| Lender protections | Step-in rights vs PPA, EPC, O&M, land lease |
| Conditions precedent | PPA signed; EPC signed; insurance bound; legal & technical DD complete |
10.5 Exit & Liquidity
MEGAPOWER’s preferred exit pathway for sponsor and institutional
equity is a portfolio-level refinancing or a strategic sale of the
operating asset between Year 8 and Year 12, subject to market conditions
and the sponsor’s pipeline strategy. Distributions during the holding
period are sized to the cash flow analysis in Section 7.
- Refinancing. After 5-6 years of operating track
record, the project will have a substantially de-risked profile. A
refinancing into longer-tenor, lower-coupon institutional debt
(insurance / pension) typically releases trapped equity and improves
equity returns by 200-400 bps. - Strategic sale. Operating utility-scale solar
assets in South Africa have traded at 9.5-11.5% unlevered project IRR
(real) in 2024-2026 transactions, comfortably below MEGAPOWER’s project
IRR. A sale to a yield-focused infrastructure fund is realistic from
Year 6 onwards. - Portfolio listing. Once the wider MEGAPOWER
pipeline reaches an aggregate operating capacity of approximately 500
MW, a separate yield vehicle (“YieldCo”) IPO becomes a credible exit
channel — precedented by Scatec, Globeleq Africa Renewables and similar
regional structures. - Distributions in interim period. Quarterly
distributions to equity commence in Year 6 (post initial cash sweep),
stepping up materially after senior-debt repayment in Year 12.
10.6 Use of Proceeds (Detailed)
The chart below sets out how the ZAR 1,851 m of total project capital
will be deployed across the major work packages. Over 60% of the capex
is concentrated in equipment and EPC delivery; the remaining 40% covers
grid, civil, development, contingency and working-capital reserves.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of MEGAPOWER Solar Power (Pty) Ltd.