Energy projects often don't cross the line because of financing hurdles. WEG, a global leader in electric technologies and energy solutions, has partnered with Energy Venture Capital (EVC), a strategic energy investment company, to provide funding of between R5 million and R500 million to hybrid energy projects.

"WEG supplies many products and services to the energy market, including equipment design, manufacturing and support for integration and installation. A problem we frequently encounter is that energy projects cannot secure funding or have to endure convoluted approval processes, long delays, and terms that are not always compatible with how the energy market operates. So we joined forces with EVC. They understand the energy market and its financing requirements, and commit to financing that will grow energy modernisation," says Eduardo Werninghaus, CEO at WEG Africa.

Energy's funding hurdles

Massive energy projects make headlines, often flush with funding from large contributors such as public sector groups and large corporations. Yet, the groundswell of South Africa's energy transition occurs below that line, at office complexes, shopping malls, schools, mixed industrial, healthcare, telecommunications, agriculture, wastewater management, and discrete mining operations.

Despite enthusiasm for the energy market, many financing institutions haven't adapted to the nuances and relative risks of energy projects, often resulting in rejections. According to an article written by Ana M. Camelo Vega, Senior Economics and Finance Researcher at the Columbia Centre on Sustainable Investment, failures can stem from at least three areas[1]:

• outdated credit rating rules that penalise projects for their country’s risks
• guarantee instruments that underperform
• loans too short-lived for infrastructure built to last decades

New funding options for African hybrid energy

EVC's mission is to fix energy funding challenges. Formed by former C-suite leaders recognising the shortfall, it tackles rising energy costs straining corporate budgets by alleviating financial burdens and processes.

WEG and EVC have signed a memorandum of understanding (MOU), establishing a partnership to evaluate hybrid energy projects case-by-case and offering funding opportunities consistent with the energy market.

"At EVC, we are always keen to support strong energy projects, especially those that help communities, corporations, and institutions establish energy resilience and control energy costs. WEG is a widely recognised OEM leader in delivering energy infrastructure with a strong project pipeline. Our alignment adds the missing piece, which is sensible and timely financing for energy projects of different sizes," says Dion Mhlaba, CEO at EVC.

WEG's energy solutions include solar, battery energy storage systems (BESS), generator sets, transformers, low and medium voltage switchgear, EV chargers, and various balance of system (BOS) and balance of plant (BOP) systems. They supply components and design services through a nationwide network of partners, backed by nationwide logistics and several local manufacturing sites.

Joining forces, WEG and EVC will primarily support projects for commercial, industrial, residential, and institutional sites seeking infrastructure such as

• Battery Energy Storage Systems (BESS)
• Mixed-use commercial park power supply
• EV charging stations
• Grid-level backup power
• Site electrification
• Backup and primary power resilience