Renewable energy developer Scatec can start constructing three of its hybrid solar and storage projects to provide emergency power to the country.
Once complete, the venture will be one of the world's biggest solar and battery facilities, Scatec said. When it is operational, it will have a total solar capacity of 540MW and battery storage capacity of 225MW/1 140MWh.
The projects are part of the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), which was launched in August 2020 to bring about 2 000MW of emergency generation capacity. However, the programme has been riddled with delays, and the financial close deadline has been pushed out a few times.
However, Scatec, a renewable energy developer headquartered in Norway, is making progress. The developer's three hybrid solar and storage projects Kenhardt 1, 2 and 3 on Tuesday reached financial close.
The projects will be based in the Northern Cape and will provide 150MW of dispatchable power under a 20-year Power Purchase Agreement with Eskom.
The project will be the largest investment in Scatec's history - R16.4 billion of the capital expenditure will be financed with equity from the owners, and R12.4 billion will be financed through debt.
"The debt will be provided by a group of lenders, which includes The Standard Bank Group as arranger and British International Investments. The Kenhardt projects are funded in local currency," Scatec said in a statement.
Scatec will own 51% of the equity in the project, and its black economic empowerment partner, H1 Holdings, owns 49%.
"Achieving commercial and financial close for the Kenhardt projects shows true commitment by our Scatec team and partners. 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," said Scatec CEO Terje Pilskog.
"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," said Jan Fourie, general manager of Scatec's sub-Saharan Africa operations.