Norwegian-based renewable energy solutions provider Scatec ASA has begun construction of a solar and battery project worth almost R16 billion in the Northern Cape.
The company announced the project in the Kenhardt region is being constructed under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) after reaching financial close.
The objective of the RMIPPPP is to fill the current short-term supply gap, alleviate the electricity supply constraints and reduce the extensive utilisation of diesel-based peaking electrical generators.
The RMIPPPP seeks 2 000MW of new generation or supply capacity to be procured from a range of energy technologies.
Once operational, Scatec ASA says, the project will have a total solar capacity of 540MW and battery storage capacity of 225MW/1 140MWh, and provide 150MW of dispatchable power under a 20-year power purchase agreement to the Kenhardt region.
The total capex for the project is R28.8 billion, with R16.4 billion to be financed by equity from Scatec ASA and R12.4 billion in non-recourse project debt.
The debt will be provided by a group of lenders, which includes the Standard Bank Group as arranger and British International Investment.
Upon completion, Scatec will own 51% of the equity in the project, with H1 Holdings, the black economic empowerment partner, owning 49%.
“Achieving commercial and financial close for the Kenhardt project shows true commitment by our Scatec team and partners,” says Scatec CEO Terje Pilskog.
“This project is a first of its kind and will be one of the world’s largest solar and battery facilities. We are now looking forward to starting construction of this unique and exciting project, which will be a major contribution to South Africa’s economy and green energy sector.”
“This is an important milestone in the procurement of renewable energy and proves that the sector can be relied upon to deliver much-needed electricity capacity to the grid,” adds Jan Fourie, general manager of Scatec Sub-Saharan Africa.
The Scatec ASA project comes as South Africa, the continent’s most advanced economy, is experiencing a severe power shortage and calls have been growing to expedite the adoption of renewables.
President Cyril Ramaphosa, Business Leadership SA and the South African Wind Energy Association have urged priority uptake of renewable energy.
Eskom, which supplies over 90% of SA’s electricity, is facing financial crisis and is struggling to maintain a steady power supply.
Share