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Google and SolarReserve today announced completion of US$260 million in financing for one of Africa's largest solar projects.

The Jasper Solar Energy Project, a 96MW photovoltaic project near Kimberly, in the Northern Cape, was selected in May 2012 under the South Africa Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). South Africa has set a target to procure 3.2GW of renewable energy by 2020.

Kevin Smith, chief executive of SolarReserve, based in Santa Monica, California, said that a strong policy signal from the government was a primary factor in the company's decision to invest in South Africa.

"It makes a huge difference if you have the regulatory policy in place to make sure there is intent from the government to proceed on these types of projects," he said. "Even in the US, policy has been inconsistent so that makes it difficult to plan and the South Africa policy has been pretty clear."

The Jasper project will be one of the largest solar installations on the continent and help South Africa shift from its carbon-intensive fleet of coal-fired stations that power a grid that has suffered decades of underinvestment.

Equity investment for the project was provided by Google, the Public Investment Corporation (PIC), Kensani Capital Investments, SolarReserve, Intikon, Development Bank of South Africa, and the P.E.A.C.E. Humansrus Fund, with Rand Merchant Bank providing preference share equity.

Google invested US$12 million of equity into the project, marking the company's second investment outside the US, and its first in Africa.

"We think it's very significant to have Google invest in this project," said Smith. "It shows that it's a well developed solid project to be able to attract investors of the calibre of Google and sends a clear message to the South Africa government that they are doing things right to attract Google into the country."

Rick Needham, Google's director of energy and sustainability, said: "South Africa has very good renewable resources, it happens to have a very strong and growing demand and supply is not yet geared up to meet that demand. We're very excited about investing into a region that has those attributes.

"South Africa happens to be a carbon-intense grid where they rely a lot on coal power - the fact that they have these great renewable resources and a very positive and forward thinking policy regime to help support renewable energy is very exciting to us and that's one of the reasons we decided to invest in South Africa."

Needham said that Google would consider additional investments in Africa, a region that has struggled to attract financing for clean energy projects.

"We don't talk much about our pipeline of potential projects but we're always looking for investments based on our two main criteria: attractive returns based on the risk factors and ones where we can be transformative or help to move the market in some way. The Jasper project meets those criteria.

"We hope other companies may follow not just because it's good for the country, but that it makes business sense for them."

In November 2012, the consortium led by SolarReserve, Kensani Group and Intikon Energy closed $586 million in financing for two 75MW solar PV projects located in South Africa’s Free State and Northern Cape, the Letsatsi project and the Lesedi project, set to deliver energy to more than 50,000 homes by mid-2014.

The Jasper project has a 20-year power purchase agreement with Eskom, South Africa's state-owned utility. The Jasper project is located adjacent to the 75MW Lesedi Solar Energy Project, which broke ground in February 2013. The Jasper and Lesedi projects, along with the Letsatsi project located near Bloemfontein, put the consortium’s total portfolio of successful solar projects at 244MW, accounting for a 20% share of South Africa’s solar energy market.

Smith said that SolarReserve would bid two solar thermal projects, Redstone and Arriesfontein, into the third round of the REIPPPP in mid-August.

"These two projects are permitted and we're spending a lot of money developing  them," said Smith. "Our goal is to get our core technology – CSP with molten salt storage – into the country."

Yingli will supply PV modules to the Jasper project which will be constructed by Spanish EPC company, Iberdrola Ingeniería.