The multibillion-dollar emergency solar energy project has reached a financial close, according to a statement from the Department of Mineral Resources and Energy.
As a result, Scatec, the country’s largest generator of renewable energy, is now authorised to start construction on three solar and battery storage projects in South Africa.
On June 2, 2022, the three Scatec projects, Kenhardt (1–3), totaling 150MW in capacity, signed all project agreements.
They then had 60 days to complete financial close.
The first three projects under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) completed financial close on July 19, 2022, according to a statement made public on Wednesday.
“Scatec has reached financial close on slightly over R16 billion financing required for the building and development of the three combined solar and battery storage projects in the Northern Cape,” the statement said.
“Following the fulfilment of all prerequisite requirements, ”
The three power plants will be South Africa’s first dispatchable renewable energy installations once they are finished.
The capacity, energy, and ancillary that will be produced by these projects, which will be available for dispatch by the system operator between 5:00 and 21:30, are to be purchased by Eskom, according to the department.
According to the department, it shouldn’t take the construction project longer than 18 months to attain commercial operation.
The three projects, which are 49 percent South African-owned, have pledged to use 40 percent local content during the development and operation stages in support of the current economic issues that South Africa is facing.
The project will also increase job generation, according to the department, and is anticipated to create 4 970 employment opportunities for South Africans during the construction and operating phases.
The R444 million that the projects have committed to supplier, enterprise, and socio-economic development efforts will also assist the local people and businesses in and around Kenhardt.
This truly marks a significant turning point for Scatec and renewable energy. We are providing proof that cost-competitive dispatchable solar power can be produced on a big scale quickly.
This demonstrates that renewable energy is the best option for boosting the expansion of electricity generation in Africa and other emerging nations, according to Scatec CEO Raymond Carlsen.
The South African economy will receive much-needed power as a result of this action, said Scatec.
RMIPPPP
According to the department, the National Energy Regulator of South Africa approved the release of the RMIPPPP bid window to the market on August 24, 2020, following the ministerial determination of 2000 MW (NERSA).
The primary goals of the bid window are to reduce the significant use of expensive diesel-based open cycle peaking generators in the medium to long term and to solve the supply shortfall identified in the Integrated Resource Plan (IRP2019).
On the deadline for bids, December 22, 2020, 28 bid proposals with a contracted capacity of 5117 MW were received.
Eleven recommended bidders were then revealed in two parts on March 18 and June 1 of the following year.
The RMIPPPP’s remaining eight projects are at various stages of agreement preparation, and news regarding more project closures will be announced in due course.