French multinational electric utility company Engie has secured R9.2 billion in loans for a 100MW solar thermal power project in SA.
The company has signed a 20-year power purchase agreement with Eskom for construction of the Kathu Solar Project in the Northern Cape. The project is expected to be operational in the second half of 2018.
The investment is despite Eskom CEO Brian Molefe recently criticising renewables as having "failed" the power utility by not providing the necessary power to avoid load-shedding at the right time of day.
Eskom, which provides virtually all of SA's power, is facing a funding crunch as it races to bring new power plants online.
The Kathu project is funded by a mix of debt and equity. The debt is funded from a club of South African banks: Rand Merchant Bank, Nedbank Capital, Absa Capital, Investec and the Development Bank of South Africa.
Engie owns 48.5% of the Kathu solar project and the rest is owned by a group of South African investors that include Investec, the Public Investment Corporation and SIOC Community Development Trust.
Kathu Solar Park is a 100MW greenfield concentrated solar power project with parabolic trough technology and equipped with a molten salt storage system that allows 4.5 hours of thermal energy storage and thus limits the intermittent nature of solar energy.
"This is an important milestone for our first concentrated solar power project in the Engie Group. The Kathu Solar Park project supports SA's strategy of increasing the contribution of renewable power and also underlines our commitment to be a key partner in achieving sustainable energy generation in Africa," says Bruno Bensasson, CEO of the Engie Africa business unit.
Approximately 1 200 jobs will be created during the construction phase. It is estimated the Kathu Solar Park will save six million tonnes of CO2 over 20 years and will further promote local economic development through various projects, such as a local community trust for the benefit of communities in the John Taolo Gaetsewe District Municipality situated in the Northern Cape and sourcing of other services from local entrepreneurs.
Kathu Solar Park has been awarded preferred bidder in the third round of the Renewable Energy Independent Power Producer Procurement Programme led by the South African Department of Energy.
In Africa, Engie has interests in two operational wind farms, the 94MW West Coast 1 wind farm in SA and the 301MW Tarfaya wind farm in Morocco.
The multinational is also constructing two thermal power generation units in Morocco. Additionally, in SA, the company owns and operates two thermal power peaking plants, the 670MW Avon plant (under construction) and 335MW Dedisa plant (in operation).
Through Solairedirect, it is in charge of two solar photovoltaic parks with a total installed capacity of 21MW located in the Western Cape.
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