AN $884 million (R9.5 billion) solar thermal power project in South Africa led by Abengoa has obtained funding from multilateral and commercial banks, according to the African Development Bank (AfDB).
The 100-megawatt Xina Solar One in the Northern Cape would receive $142m in loans from the AfDB, it said on its website. The facility would also borrow from other development institutions and three local commercial banks, it said. Abengoa declined to comment.
The project, the third promoted by the Spanish firm in South Africa, is one of five such plants contracted under the government’s clean energy bidding programme. It will use concentrated solar technology, where mirrors focus sunlight to produce steam and spin turbines.
South Africa is seeking to add 6 925MW of capacity by 2017 through the renewable-energy tenders in an effort to reduce reliance on coal. The project was one of two that was approved in the third round of bidding in October last year. Winners need to reach financial close by the end of this month, and companies can register for the fourth round of tenders this month.
Another 200MW in solar thermal power capacity had been tendered in March because of keen interest from investors, the Department of Energy said.
Abengoa, the largest developer of such projects, has a 40 percent interest in the plant. It is also backed by the Industrial Development Corporation, the Public Investment Corporation and a community trust.
The plant could store up to five hours of power and would cost about R9.5bn, the AfDB said. It is the first large-scale clean energy in South Africa financed by the bank. The International Finance Corporation will provide $67m in loans, its website shows. – Bloomberg