A consortium of three companies — US PV developer SolarReserve, financial services company Kensani Group and South African renewables developer Intikon — has closed a financial deal worth R5.15 billion (US$586 million) to fund the development of two 75MW PV plants in South Africa.
According to the consortium, the deal represents two of the largest project finance transactions ever completed in South Africa.
The 75MW Letsatsi project will be located in the Free State while the 75MW Lesedi Project will be constructed in the Northern Cape. The projects were selected by the South African Department of Energy (DOE) during the first round of bidding under the South Africa Renewable Energy Independent Power Producer Procurement Program (REIPPPP).
Construction of the projects will be undertaken by a consortium led by ACS Cobra, along with Spain-based Gransolar and South Africa’s Kensani Energy EPC. The two projects are expected to generate 2,640 jobs during the construction phase and 140 new jobs during the operation of the plants.
“The successful financial closure of the first round of REIPPPP projects is precedent setting on a global scale and has once again demonstrated the South African Government's commitment to the enhancement of national infrastructure which will be a catalyst of economic development and job creation,” said Wandile Motlana, Chairperson of the Kensani Group.
Scheduled to complete by mid-2014, the projects are estimated to generate enough output to supply 50,000 households. Electricity generated from the projects will be sold to South African utility firm Eskom under 20-year power purchase agreements.
Moreover, a percentage of revenues generated from the plants, estimated to be around R510 million over the life of the projects, will be set aside and invested in projects that will benefit local communities.