Botswana is set to begin building its first large-scale solar plant after developers secured $100 million in financing. Investors are betting that rising electricity demand across southern Africa will create a profitable market for surplus power. Rand Merchant Bank, a unit of FirstRand, acted as the lead arranger for the project.

Expanding regional power networks

The 100-megawatt Tati Solar Project will sell electricity into the regional grid. Developed by Shumba Energy’s Etavi Renewables, the facility targets commercial operations by 2027. The project marks a significant shift toward cross-border energy trading as regional businesses and mining operations seek reliable power alternatives to state utilities.

Rand Merchant Bank underwrote the entire financing package, creating a commercially viable structure for utility-scale regional trade. Siyanda Mflathelwa, RMB’s head of infrastructure sector solutions, stated that the arrangement increases the volume of electricity traded on the Southern African Power Pool day-ahead market, benefiting twelve connected nations.

The regional power market serves more than 360 million people and businesses across southern Africa. Demand for electricity is rising steadily, driven by expanding mining operations, new data centers, and broader efforts to expand energy access. This growing consumer base makes independent power projects increasingly attractive to international lenders.

Mitigating climate and supply deficits

Climate-related droughts have severely reduced hydropower output in countries like Mozambique, while coal plant shutdowns limit traditional supply. Mflathelwa expressed confidence that these structural deficits justify substantial capital investments. Investors now see clear commercial viability in funding infrastructure to bridge the immediate supply gaps.

South Africa expects to add up to 53 gigawatts of new generation capacity by 2032. To maximize this output, RMB expects the regional grid to integrate with South Africa’s new wholesale electricity market. This market allows private companies to sell power directly into the national grid after severe blackouts.

Regional deficits remain concentrated in Zambia and the Democratic Republic of Congo, where mining operations require massive energy supplies. These nations produce critical minerals vital for global technology supply chains. Consequently, banking executives expect future energy planning and generation investments to focus heavily on these resource-rich areas.