Solar Capital De Aar 3, R2.1 billion Hedge Provider

Dec 01, 2017

In December 2017, Standard Bank’s Client Solutions team in Global Markets acted as long-term hedge provider to Solar Capital De Aar 3 (“SCAD3”) and provided an interest rate risk management strategy in the form of a R2.1 billion, 14-year interest rate swap. The team also negotiated an exit from the existing hedge provider and the original 5-year hedge was novated from Deutsche Bank to Standard Bank. 

This sizable transaction was executed efficiently during an illiquid time of year prior to the ANC elective conference in December 2017. The hedging opportunity was executed on the back of a successful refinance of the Renewable Asset by Standard Bank’s Project Finance Debt Team. 

Solar Capital De Aar 3 is a solar farm located in De Aar in the Northern Cape. It was awarded preferred bidder status in bidding round two of the Department of Energy’s (DOE) highly successful Renewable Energy Independent Power Producer Procurement (REIPPP) programme. 

With construction completed in April 2016, it currently supplies 90MW of solar power to Eskom under a long-term power purchase agreement. 

It is the first successful refinancing of a Renewable Asset in South Africa.

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