Africa Green Energy Holdings — Funding Structure & Use of Proceeds
The ZAR 9.0 billion funding structure across senior debt, mezzanine and equity, the DFI and IFC participation, the gearing and the detailed use of proceeds.
Section 17 · Business Plan
Funding Structure & Use of Proceeds
The ZAR 9.0 billion funding structure across senior debt, mezzanine and equity, the DFI and IFC participation, the gearing and the detailed use of proceeds.
AGEH is raising a total of R8,850 million in blended capital to
deliver the 550 MW portfolio. The financing structure is engineered to
optimise weighted-average cost of capital (WACC) while satisfying IFC
Performance Standards, DFI mandate criteria, and South African Reserve
Bank exchange control provisions. The Company has secured indicative
term sheets representing 92% of the target raise as of the date of this
Memorandum.
17.1 Capital Stack Overview
The capital stack reflects a deliberate sequencing of risk capital:
sponsor equity at 16.9% absorbs first-loss exposure, senior IFC and DFI
debt provides patient long-tenor financing (18-20 years), and commercial
bank facilities provide cost-competitive mid-tenor capital. The blended
IFC Climate Finance tranche offers the most concessional terms (JIBAR +
195 bps) in recognition of the project’s high climate-impact rating.
17.2 Detailed Use of Proceeds
| Application | Amount (R m) | % of Total | Description |
|---|---|---|---|
| Solar PV EPC contract | 3,250 | 36.7% | 300 MW Tier-1 turnkey EPC |
| Wind EPC contract | 2,050 | 23.2% | 150 MW including 27 × 5.6 MW turbines |
| BESS EPC contract | 1,420 | 16.0% | 100 MW / 400 MWh LFP battery system |
| Owner’s plant & substations | 705 | 8.0% | 33/132 kV substations, MV reticulation |
| Grid connection & transmission | 410 | 4.6% | NTCSA wheeling, grid upgrades |
| Development costs (capitalised) | 350 | 4.0% | Permitting, studies, legal, advisors |
| Owner’s contingency | 185 | 2.1% | 3% net of EPC scope |
| Interest during construction | 180 | 2.0% | IDC on debt drawdowns |
| Financing fees | 135 | 1.5% | Lender arrangement, commitment, legal |
| Land acquisition | 90 | 1.0% | Servitudes, freehold purchase |
| Insurance during construction | 75 | 0.9% | CAR, DSU, MB |
| Total Use of Proceeds | 8,850 | 100.0% |
Table 17.1 — Detailed Use of Proceeds
17.3 Drawdown Schedule
Drawdowns follow construction milestones, certified by an Independent
Engineer per lender requirements. Equity is fully injected at financial
close to demonstrate sponsor commitment and de-risk lender exposure
during early-stage civil works. Debt facilities draw progressively
against achievement of physical and financial completion gates: site
mobilisation (10%), foundation & civil completion (25%), electrical
erection (50%), commissioning readiness (75%), and COD (100%).
17.4 Key Debt Terms & Covenants
| Covenant / Term | Threshold | Test Frequency |
|---|---|---|
| Historic 12-month DSCR (distribution lock-up) | ≥ 1.20x | Semi-annually |
| Forward 12-month DSCR (distribution lock-up) | ≥ 1.20x | Semi-annually |
| Loan Life Coverage Ratio (LLCR) | ≥ 1.30x | Semi-annually |
| Project Life Coverage Ratio (PLCR) | ≥ 1.50x | Annually |
| Minimum DSRA balance | 6 months forward debt service | Continuous |
| Insurance maintained per Tier-1 brokers | 100% replacement value, BI cover | Continuous |
| No material litigation > R50m | Reporting threshold | Quarterly |
| Distributions blocked – cash sweep | <1.10x DSCR | Semi-annually |
| Permitted indebtedness | Senior + IFC + DFI ring-fenced | Per drawdown |
| Change of control | Sponsor < 35% triggers consent | Continuous |
Table 17.2 — Key Financial Covenants & Lender
Protections
17.5 Security Package
Lenders benefit from a comprehensive security package customary for
African project-finance transactions:
- First-ranking notarial bonds over all SPV assets including
PP&E, IP and contractual rights. - Pledge of 100% of shares in each project SPV, subject to BEE
shareholding preservation undertakings. - Direct agreements (estoppel certificates) with Eskom, NTCSA, EPC
contractors, O&M providers and key offtakers granting cure
rights. - Assignment of all material project agreements including PPAs, EPC
contracts, O&M agreements, insurance policies, and government
concessions/licences. - Cash account control agreements (CACAs) over all project bank
accounts, with waterfall enforcement. - Sponsor support: Equity contribution agreement guaranteed during
construction; standby letter of credit for cost overrun support up to
R250 million.
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 Africa Green Energy Holdings (Pty) Ltd.