The European Investment Bank (EIB) and FirstRand Bank have allocated €400 million (US$444 million) to support the development of solar PV and wind generation projects in South Africa.
Announced last week (12 September), the financing has been granted via the Global Gateway, Europe’s external strategy for clean and sustainable infrastructure. It complements the Just Energy Transition Partnership (JETP) to support South Africa’s decarbonisation and to foster new opportunities in the new green economy.
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South Africa has widely been deemed one of the best locations worldwide to develop solar PV projects. Indeed, the EIB states that the country receives around 2,500 hours of sunlight each year, which puts it among the top three potential locations for solar generation.
Despite this, investment has not matched the country’s potential. The EIB believes that supporting private sector investment to diversify South Africa’s energy mix will make strides to increase energy security, reduce power cuts and fight climate change.
Indeed, according to the International Renewable Energy Agency (IRENA), in 2021, high levels of sunlight in Africa meant that it accounted for 40% of the world’s solar power generation potential but generated just 1.48% of its electricity from solar sources.
EIB vice-president Ambroise Fayolle noted that the organisation looks to support green transition opportunities.
“As the EU’s climate bank, the EIB is committed to working with its partners to support a green transition. Companies have recognised the business opportunities in moving to clean energy technologies; EIB financing is there to back those investment needs,” Fayolle said.
The initiative with FirstRand Bank was announced during Fayolle’s visit to South Africa to launch the EIB’s Regional Hub for Southern Africa and the Indian Ocean.
Africa’s untapped solar PV potential
The African continent continues to see various large-scale solar PV projects planned and developed, with South Africa already seeing major projects being pursued in the past couple of years.
For instance, in May 2024, PV Tech reported that the first projects under the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), launched in April 2022, had been approved and reached commercial close. The total generation capacity of these projects stands at 360MW.
The seventh round of the REIPPPP tender was announced in December 2023, seeking 1.8GW of solar PV capacity.
South Africa also holds one of the largest battery energy storage systems (BESS) in the southern hemisphere, amounting to 225MW/1,140MWh. This BESS is co-located alongside a 540MW solar PV power plant owned by Norwegian developer Scatec.
The plants began commercial operations in December 2023. As part of ongoing efforts to mitigate energy supply and peak demand management issues, Scatec is contracted to supply 150MW of dispatchable electricity from the complex between the evening peak demand hours of 17:30 and 21:30 daily.
Earlier this year, PV Tech Premium delved into the African continent, weighing some of the trends witnessed in its solar PV market in 2023.
