Project finance for renewable energy and infrastructure
Raising and structuring capital for solar, energy and infrastructure projects in South Africa — senior debt, equity, blended and DFI structures, and Section 12B where it applies.
How project finance differs from business funding
Project finance is structured around the project, not the sponsor's balance sheet: lenders and investors look to the project's contracted cash flows, offtake agreements and assets for repayment. That changes everything about how the raise is built — the financial model, the security package, the debt-equity ratio, and the risk allocation between sponsor, lenders and offtaker. Getting that structure right is what makes a project bankable.
The capital available for South African energy projects
- Senior project debt — from commercial banks and development finance institutions, secured against the project's assets and cash flows.
- Development finance — the IDC, DBSA, and continental and international DFIs (AfDB, IFC, BII, DEG, Proparco) actively fund African energy and infrastructure, often on terms commercial lenders won't match.
- Equity and mezzanine — sponsor equity, third-party project equity, and mezzanine to bridge the gap and reduce the sponsor's contribution.
- Blended structures — combining concessional DFI capital with commercial funding, frequently the right answer for projects with strong impact and moderate commercial returns.
Section 12B and the incentive layer
South African renewable energy assets can access Section 12B capital allowances, which materially change investor returns and therefore how the equity is raised and structured. Reading the current incentive position correctly — and building it into the funding structure — is part of getting the raise right. More on Section 12B →
The development-funding advantage
Most advisors know equity and bank debt. Caban's development funding desk works the DFI and blended-finance side specifically — the IDC, SEFA, DBSA, Land Bank, and continental and international DFIs — which is exactly where a large share of African energy and infrastructure capital sits. For a renewable project, access to that side of the market is often the difference between a fundable structure and a stalled one. Caban has executed more than 200 transactions since 2012 across debt, equity, grant and blended structures — including energy, infrastructure and green-construction mandates.
Beyond renewables
The same project-finance discipline applies to property development, logistics infrastructure and manufacturing capacity. If your project is structured around its own cash flows and assets, the structuring approach is the same — start the conversation below.
Questions, answered
What is renewable energy project finance?
Capital raised against a project's own contracted cash flows and assets rather than the sponsor's balance sheet — typically a structured mix of senior debt, equity, and blended or development finance. The structure is built around the project's offtake agreements, model and risk allocation, which is what makes it bankable.
How do I fund a solar or energy project in South Africa?
Through a structured raise combining senior project debt (from banks and DFIs), sponsor and third-party equity, mezzanine to bridge the gap, and often development finance from the IDC, DBSA or continental DFIs. Section 12B capital allowances can also improve the equity returns and should be built into the structure.
What is Section 12B and how does it affect project finance?
Section 12B provides capital allowances on qualifying South African renewable energy assets, materially improving investor returns. Because it changes the economics of the equity, it should be factored into how a renewable project's funding is structured and raised.
Which DFIs fund energy and infrastructure in South Africa?
Domestically the IDC and DBSA; continentally and internationally the AfDB, IFC, BII, DEG and Proparco, among others. These institutions actively fund African energy and infrastructure, frequently on terms commercial lenders cannot match — access to them is a genuine advantage in structuring a project raise.
Does project finance apply beyond renewable energy?
Yes. The same discipline — raising capital against a project's own cash flows and assets — applies to property development, logistics infrastructure and manufacturing capacity. If a project stands on its own economics, the structuring approach is the same.