Independent power producer Sola Group has started the construction of a R2.5 billion solar plant in the North West province.
This, after the IPP reached an agreement with local commercial banks and partners to provide finance to start construction on a 132MWp solar project in the province.
The construction commences as South Africa continues to endure acute energy shortages, with the country increasingly looking to renewable energy sources to plug the energy shortfall.
State-owned power utility Eskom largely produces power from fossil-fuel-powered power plants, and poor maintenance at these facilities has largely been blamed for the electricity challenges besetting the country.
In a statement, Sola Group says the project will sell energy to platinum mining operations operated by African Rainbow Minerals through a long-term power purchase agreement using the national grid to deliver the energy to the mining sites.
Eskom is a key partner in facilitating the measurement and reconciliation of energy from the generator to consumer accounts.
According to the company, the project will generate 270GWh of clean electricity annually and provide much-needed electricity to the national grid.
The electricity is generated by converting energy from sunshine into electrical energy and is 100% carbon-free.
The project is owned by Sola Group and African Rainbow Energy, with senior lending from Absa, Standard Bank, DBSA and Nedbank.
Sola Group notes the project is uniquely local in that the financing, ownership, construction and design are all 100% South African.
This project is the third large-scale renewable energy project closed by Sola Group in six months, bringing its total number of MWs under construction to 390MW.
This represents 588 000 solar panels over an area of 750Ha, says the group.
Last year, African Rainbow Energy and Sola reached financial close on 200MW solar PV projects, worth R4 billion, for Tronox Mineral Sands.
At the time, the Patrice Motsepe-owned African Rainbow Energy and Sola announced the closing of the transaction, calling it “the largest corporate renewable energy power purchase agreement in Africa”.
In its statement today, Sola Group says for context, according to the Council for Scientific and Industrial Research, in terms of energy production in 2022, Eskom load-shed 8.3TWh of electricity.
It notes the 390MW of projects will provide nearly 1TWh of energy annually, equivalent to 11% of the country’s shortfall in electricity supply.
“These projects have created 1 200 employment opportunities. Apart from providing cheaper, cleaner energy into the network, this project also stimulates local economic development in areas where people have had limited employment opportunities,” says Chris Haw, executive director and co-founder at Sola Group.
The company adds the project has committed to training local employees with valuable skills that will be in high demand, given South Africa’s estimated requirement of 6 000MW of new clean power generation annually for the next 10 years.
Sola Group will construct and operate the facility through a joint venture with South African construction company WBHO.
“This project, together with two other projects under construction in the North West, with a total of more than 300MWAC, brings R6.4 billion of investments to the province. African Rainbow Energy is now invested in 1 Gigawatt of renewable energy projects,” says Brian Dames, CEO of African Rainbow Energy.
“As a leading clean energy company, this demonstrates our commitment to build a modern privately-owned utility using technology to provide clean energy solutions to large customers, supporting the transition of the energy sector, creating more jobs and changing the lives of South Africans.”