FNB launches ‘FNB Energy Solutions’ to power up SA businesses

08 October 2024 - In a strategic move aimed at addressing the growing demand for affordable, reliable, and sustainable energy solutions, FNB in collaboration with strategic partners has launched ‘FNB Energy Solutions’, a renewable energy offering designed to ease the financial and administrative burden of renewable energy transition for South African businesses.

?Businesses can acquire a comprehensive energy-as-a-service solution via a Power Purchase Agreement (PPA) model where FNB Energy Solutions retains ownership of the renewable energy infrastructure and sells the energy produced to the client. The solution primarily focuses on solar photovoltaic (PV) installations with or without battery back-up, but other renewable energy technologies can also be considered to meet specific client needs. It is ideal for businesses that have significant daytime electricity demands, typically spending upwards of R200 000 per month on electricity. The minimum generation capacity provided is 300kW, which suits high-energy users that have sufficient roof space at their premises for the solar panels required.

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Monique Botha, FNB Sustainable Energy Lead says “FNB Energy Solutions focuses on helping businesses to address challenges such as energy security and rising electricity costs, while also supporting their efforts to meet their sustainability targets – all without significant upfront capital investments or the need to take on the management of their renewable energy assets.”

The foundation of the FNB Energy Solutions offering is its partnership approach. The model involves collaboration between FNB, as the funding provider for these projects, with expert technical and asset management partners that are established leaders in South Africa's renewable energy industry. On the technical side, development partners like ACES Africa, Nuvo Energy, Rhino Energy and RenEnergy bring expertise in solar PV, energy storage solutions and custom system design. For project facilitation and ongoing management, SOLINK and Matriarch provide specialised advisory services and ensure optimal asset performance.?

FNB Energy Solutions retains ownership of the renewable energy infrastructure which is installed at a client’s premises by one of its development partners and managed by FNB Energy Solutions.

This model allows businesses to bypass the need for large capital investments, as FNB Energy Solutions takes full ownership of the energy assets, removing the burden of capital expenditure from the client’s balance sheet. “Our solution is designed to help businesses meet their sustainability goals and energy needs without placing strain on their financial resources,” says Botha. “We take on the performance and operational risks, allowing our clients to focus on what they do best - running their businesses.”

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Kyle Durham, Head of Sustainability at FNB, explains that the FNB Energy Solutions offering is far broader than just helping organisations achieve a stable energy supply. “FNB Energy Solutions arose from the recognition that South African businesses have a broad set of energy needs, including achieving sustainability goals, lowering costs and address energy certainty challenges,” he explains. “So, while load-shedding has become less of a critical issue, making the shift to renewable energy is still a strategic priority for many.”

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While PPA embedded energy solutions aren’t new to South Africa, FNB Energy Solutions distinguishes itself in several key areas. While many providers in the market require 20 to 25-year commitments, FNB Energy Solutions typically offers shorter PPA’s, providing businesses with greater flexibility. This shorter-term approach allows companies to adapt their energy strategies as technology and market conditions evolve.

Cost savings are another focal point of the offering. FNB Energy Solution's development partners are mandated to design efficient and cost-effective solutions that potentially offer immediate financial benefits to clients. This focus on cost-effectiveness ensures that businesses can potentially see returns on their investment from day one.

FNB Energy Solutions also offers a unique path to ownership. After the fifth year, clients have the option to purchase the entire renewable energy plant at a predetermined price. This feature provides businesses with the flexibility to transition from a service model to outright ownership when it aligns with their long-term energy strategies.

The success of FNB Energy Solutions is underpinned by the careful selection of reputable partners who are committed to success and have proven track records in the renewable energy sector. “FNB Energy Solutions is not just about financing - it’s about providing a full-service energy solution,” Botha emphasises. “Our partners are leaders in their fields and are fully invested in delivering world-class quality and consistently excellent service.”

FNB Commercial is focused on offering customers trusted beyond banking services in adjacent activities with technical partners to deliver our customers greater value within a broad ecosystem.

"We're not claiming to be reinventing the wheel, but we do believe we’re significantly improving it,” Durham concludes. “The FNB Energy Solutions approach offers tangible improvements to existing models and reflects our commitment to supporting sustainable business practices and contributing to South Africa's broader energy transition."

?FNB banked businesses interested in exploring how FNB Energy Solutions can support their energy needs can contact their Banker.