INVESTEC has agreed with the European Investment Bank (EIB) to establish a ?100m funding facility to promote energy efficiency and the generating of clean energy in SA.

Funding for renewable energy projects in SA has been scarce in the past as few such operations existed. The energy market was also hampered by constraints relating to access and other factors.

But the government has begun promoting the industry through its Green Economy Accord. There is speculation it may announce the first round of renewable energy projects next week, with 53 proposed projects involving capital expenditure of more than R64bn under consideration.

"This facility . has the potential to help the government and industry transform SA's renewable energy efforts," Investec's Fazel Moosa said in Durban yesterday. "Investec's global and local experience in project finance for the renewable energy sector, as well as its current investment pipeline, were instrumental in bringing this deal together."

The EIB, which has the European Union states as shareholders, is a leading lender for climate action and renewable energy. EIB spokesman Richard Willis said the partnership with Investec was the result of the EIB searching for projects in SA over three years. He said the benefits of EIB funding was that it granted loans over longer periods than conventional banks usually did, and at relatively favourable interest rates.

The EIB and Investec would each contribute ?50m to the facility, which would be available for selected opportunities over three years. Investec had a pipeline of co- generation and energy efficiency projects that would benefit from funding, said Mr Moosa. Each project would be evaluated by Investec specialists and a credit committee, and according to criteria set by the EIB. "Ensuring reliable electricity supply and more efficient use of energy is essential for economic growth around the world. Working closely with Investec, the EIB looks forward to addressing energy challenges in SA," EIB vice-president Plutarchos Sakellaris said.

Investec has been in renewable energy in SA through three wind power operations in the Western Cape over the past four years. The group has provided funding for solar, wind and hydroelectric plants in other parts of the world, and for two solar projects being considered by the government.

"Does SA have the resources for wind and solar power? The answer is yes," said Mr Moosa.

"Is it financially feasible to have these plants here? Yes it is. The government's target of having 10% of electricity generated from renewable energy is not unsustainable. The government and the private sector need to continue to work together on this."