Regulatory uncertainty in the energy sector made it more difficult to progress with renewable energy projects, Nedbank executives asserted on Tuesday.
Nedbank is heavily involved with a number of wind farm projects in the Eastern Cape, but said that none of these were near closure.
With regard to concentrated solar power plants (CSPs), renewable energy feed-in-tariff (Refit) certainty would need to be in place before investment decisions were made, because the capital costs for CSP projects were so high.
“Capital is scared. Certainty on the projects must be ensured,” reiterated Nedbank African treasuries, carbon and financial products unit head Kevin Whitfield.
He said that Nedbank was involved in financing a number of projects in the hydro power, biomass and cogeneration spheres, as a trend emerged for companies to tap into their own power generation opportunities.
The executives were speaking at an event in Sandton where Nedbank announced its achievement of carbon neutrality.
World Wide Fund for nature climate change programme manager Richard Worthingtoncommended the bank on this achievement, and encouraged it to improve on this.
Worthington further encouraged Nedbank to work towards establishing a dedicated renewable energy fund, as he forecast that there would be much opportunity in South Africa in the renewable energy space in the next 18 months, as integrated energy plans and integrated resource plans were firmed up.
He stated that it was a pivotal time for renewable energy in South Africa.
The National Energy Regulator of South Africa has published a Refit, with higher rates to be paid for electricity generated from renewable energy sources.
The second phase of the Refit was published in February 2010, however, the power purchase agreements have yet to be finalised. This was a major impediment against taking renewable energy projects to a bankable feasibility stage.