Standard Bank Secures R1.92bn Deal to Support Africa’s Largest Hybrid Renewable Energy Cluster

Standard Bank has secured a bespoke R1.92 billion equity financing deal to back H1 Holdings’ stake in the Kenhardt hybrid battery-and-solar energy complex, the largest integrated renewable energy cluster in Africa. The deal, concluded by the bank’s Corporate and Investment Banking division, allows for the exit of earlier investors — British International Investment, the Industrial Development Corporation, and Norfund — and ensures long-term financial stability for the project at the heart of South Africa’s evolving energy transition.

The financing is backed by H1 Holdings’ 49% interest in the Kenhardt complex, a pioneering project demonstrating how solar power, coupled with utility-scale battery storage, can help stabilise power systems facing chronic reliability challenges. This facility presents a practical solution to Africa’s energy volatility, offering a model for integrating renewable energy without compromising grid stability — a key issue for the continent’s sustainability and industrial development.

Hybrid energy systems, though rare at this scale across Africa, combine multiple energy sources — typically solar arrays and long-duration batteries — to supply reliable, dispatchable power during peak demand or grid stress events. While these systems reduce emissions and mitigate intermittency issues seen in pure solar or wind projects, they require sophisticated control systems, advanced battery technology, and significant upfront investment.

H1 Holdings’ Growth and Future Prospects

H1 Holdings, a Black-owned energy investor, has seen significant growth, with a portfolio comprising 24 energy infrastructure projects. These projects collectively represent approximately 2.8 GW of generation capacity and 1.14 GWh of storage capacity, helping to alleviate South Africa’s power constraints, which continue to hinder economic recovery.

The financing will enable H1 Holdings to consolidate its operations, expand its asset management capabilities, and pursue further clean energy projects aligned with Africa’s growing demand for reliable, diversified power sources.

Standard Bank’s Role in Africa’s Energy Landscape

Standard Bank’s involvement goes beyond this transaction. The bank has positioned itself as a key player in financing large-scale renewable and hybrid energy projects across Africa. Its role in projects such as the R4.9 billion financing of South Africa’s 140 MW Ishwati Wind Farm and its leadership in the NAD 1.2 billion Diaz Wind Project in Namibia illustrate the bank’s expanding regional reach.

The bank’s broader strategy also reflects its commitment to addressing Africa’s electricity demand, constrained public budgets, and the increasing need for climate-resilient energy systems. Although capital-intensive, hybrid energy projects offer a path to decarbonisation without sacrificing grid reliability — an issue crucial for sectors like mining, transport, agribusiness, and manufacturing, where power outages have historically hampered competitiveness.

Tackling Transmission Bottlenecks

One of the most significant barriers to renewable energy deployment in Africa is transmission bottlenecks. Even bankable solar and wind projects cannot contribute to the grid without adequate infrastructure to evacuate power. Standard Bank’s thought leadership in addressing South Africa’s transmission deficit highlights the need for coordinated responses across the sector, not just financing alone.

Implications for Africa’s Energy Transition

The Kenhardt financing deal has broader implications for Africa’s energy future. With governments across the continent setting increasingly ambitious renewable energy targets, the role of commercial banks in mobilising capital for large-scale projects is more crucial than ever. Domestic and regional banks are key to bridging the funding gaps, especially as global climate finance continues to fall short of Africa’s needs.

For Africa’s energy transition to be both credible and equitable, financing must reach local developers who can build capacity and transfer technical knowledge. H1 Holdings, as a 100% Black-owned energy company, exemplifies the type of local actor needed to balance foreign investment with local ownership, underscoring the importance of structuring deals that sustain African participation in key sectors.

As the continent accelerates its shift towards diversified energy systems, projects like Kenhardt demonstrate the potential for success when local capital, technical expertise, and policy support come together to create commercially viable infrastructure aligned with long-term sustainability goals.