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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--South Africa's ambitious renewable energy program, which is to be executed by independent power producers, is moving to the committed stage of implementation. One of the country's major banks, the Standard Bank, is backing the program by underwriting $1.1 billion of debt for the developments.
The bank is backing 11 of the 28 wind and solar projects selected in the first bid window under the country's Renewable Energy Independent Power Producer Program (REIPP). The bank's clients will develop 338 megawatts (MW) of onshore wind and 235 MW of solar photovoltaic (PV) capacity, which is scheduled to be operational in 2014.
This week, the government and the state-owned power utility Eskom (Johannesburg) signed the power purchase, implementation and direct agreements for projects covering wind and solar projects, which will have an installed capacity of 1,415 MW and an investment of $5.5 billion. The debt-funded portion of the first phase will be $3.1 billion in total.
The Standard Bank will be financing five out of the eight wind projects, and six of the 18 solar projects. The banking group is also providing interest and currency hedges, carbon trading credits, and corporate bonding and guarantee facilities. The bank also is moving on projects in the second bidding window and will participate in the third bidding window. Both these windows will close in the first half of 2013.
As the renewable program gets into gear, Abengoa (Seville, Spain) began the construction of "Khi Solar One," the 50-MW solar power tower, and "KaXu Solar One," the 100-MW parabolic trough plant. Both of these projects are located in the Northern Cape Province near Upington and Pofadder, respectively. They will provide clean energy, while creating local jobs and new industries in the region.
The construction of the two projects will create about 1,400 local jobs, with a peak of 2,000, and about 70 permanent operating jobs. There also will be a significant number of indirect jobs created.
Abengoa has developed proprietary technology to meet South Africa's needs. Both projects use advanced dry cooling technology, which reduces water consumption by about 66% when compared to other concentrated solar power (CSP) plants. The plants also will have power storage capacity of two to three hours.
The implementation of the REIPP encourages the initiation of more independent power producer (IPP) projects (without Eskom's traditional monopoly of project participation); supports the advance of renewable power generation in an ideal physical environment; and makes a contribution to grid supply security, as the commissioning of major additional thermal base load comes down the power pipeline slower than scheduled. For more information, see August 20, 2012, article - Independent Power Producers in South Africa Submit 60,300 Megawatts of Projects and June 11, 2012, article - South Africa's 3,725 Megawatt Renewables Roll-Out Could Bring More than $12 billion in Investments.
By moving forward with the REIPP program, the government has given a stimulus to renewable installations and equipment manufacturing, and another confirmation that IPPs are welcome in the national power plan--which, until this time, was the monopoly of Eskom.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The bank is backing 11 of the 28 wind and solar projects selected in the first bid window under the country's Renewable Energy Independent Power Producer Program (REIPP). The bank's clients will develop 338 megawatts (MW) of onshore wind and 235 MW of solar photovoltaic (PV) capacity, which is scheduled to be operational in 2014.
This week, the government and the state-owned power utility Eskom (Johannesburg) signed the power purchase, implementation and direct agreements for projects covering wind and solar projects, which will have an installed capacity of 1,415 MW and an investment of $5.5 billion. The debt-funded portion of the first phase will be $3.1 billion in total.
The Standard Bank will be financing five out of the eight wind projects, and six of the 18 solar projects. The banking group is also providing interest and currency hedges, carbon trading credits, and corporate bonding and guarantee facilities. The bank also is moving on projects in the second bidding window and will participate in the third bidding window. Both these windows will close in the first half of 2013.
As the renewable program gets into gear, Abengoa (Seville, Spain) began the construction of "Khi Solar One," the 50-MW solar power tower, and "KaXu Solar One," the 100-MW parabolic trough plant. Both of these projects are located in the Northern Cape Province near Upington and Pofadder, respectively. They will provide clean energy, while creating local jobs and new industries in the region.
The construction of the two projects will create about 1,400 local jobs, with a peak of 2,000, and about 70 permanent operating jobs. There also will be a significant number of indirect jobs created.
Abengoa has developed proprietary technology to meet South Africa's needs. Both projects use advanced dry cooling technology, which reduces water consumption by about 66% when compared to other concentrated solar power (CSP) plants. The plants also will have power storage capacity of two to three hours.
The implementation of the REIPP encourages the initiation of more independent power producer (IPP) projects (without Eskom's traditional monopoly of project participation); supports the advance of renewable power generation in an ideal physical environment; and makes a contribution to grid supply security, as the commissioning of major additional thermal base load comes down the power pipeline slower than scheduled. For more information, see August 20, 2012, article - Independent Power Producers in South Africa Submit 60,300 Megawatts of Projects and June 11, 2012, article - South Africa's 3,725 Megawatt Renewables Roll-Out Could Bring More than $12 billion in Investments.
By moving forward with the REIPP program, the government has given a stimulus to renewable installations and equipment manufacturing, and another confirmation that IPPs are welcome in the national power plan--which, until this time, was the monopoly of Eskom.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
