AFRICA EVENT REPORT POD 4: GREEN HYDROGEN AND MINING
FINANCING GREEN HYDROGEN PROJECTS
Makole Mupita, Co-Founder & Executive Director, Mahlako a Phahla Investments Makole Mupita outlines the typical funding structure of a renewable energy project, usually an IPP. The company implementing the project is a Special Purpose Vehicle (SPV) that has in place a Power Purchase Agreement with an offtaker, for example, a mine. Usually, the PPA is a “take-or-pay” contract, an arrangement preferred by financiers. For diversifying risk, the SPV will also have a fixed-price construction contract with ~ 52 ~
an EPC Contractor, and an Operations & Maintenance contract with an O&M Contractor. This structure is then funded by debt providers or equity investors. Makole Mupita is a principal at the Masako Energy Fund, which looks at transactions in the energy value chain in renewables including hydrogen and gas. Notably, financiers, for abundant caution, also have binding contracts with the project’s EPC Contractor and O&M Contractor. This structure is modified for a green hydrogen project by adding on an Electrolyser module with its own EPC and O&M Contractors. The offtake
