- Two of the three EDF Renewables wind projects have reached financial close.
- The San Kraal and Phezukomoya wind energy projects, each with an installed capacity of 140MW, are located in the Umsombomvu Local Municipality on the boundary of the Eastern Cape and Northern Cape Provinces.
- Absa acted as the joint mandated lead arranger and lender for the two projects.
- The third project, which misses the 60 day deadline stipulated by the country’s Department of Mineral Resources and Energy headed by Mr Gwede Mantashe, is expected to reach financial close in early 2023.
The projects, developed by french IPP’s EDF Renewables local division, together with local Broad Based Black Economic Empowerment (BBBEE) EPC GIBB-Crede, a unnamed local community trust and its controversial local BEE partner, H1 Holdings, who is named as a BEE partner in no less than 21 of the 25 winning projects bids in the country’s Renewable Energy Independent Power Producer Procurement Programme Bid Window 5 (REIPPPP BW5). Read more
REIPPPP BW5 has been marked with extended delays, mismanagement and controversy. The fiasco has resulted in significant reputational damage to the country’s once globally respected renewable energy procurement programme. This is no more evident in the response to Bid Window 6 where the number of bidders has dropped by around half compared to Bid Window 5. Read more
Last month South Africa’s Mineral Resources and Energy Minister, Mr Gwede Mantashe, announced that the government is considering reopening REIPPPP Bid Window 5 citing that only one bidder with three wind projects had reached legal sign-off. Subsequently, IPP Red Rocket have reached legal close on their three 140MW wind projects. Read more
EDF were awarded preferred bidder status in October 2021, under Round 5 of the Renewable Energy Independent Power Producer Procurement Programme. EDF reached legal close on 23rd September and were given 60 days to reach financial close. Read more
Related news: Preferred bidders in REIPPPP Bid Window 5 must shoulder blame for the delays
The two projects are expected to be commissioned from late-2024 and will contribute to the electricity needs of over 280,000 South Africans. During the two-year construction period, the two projects will provide in excess of 250 permanent jobs to South African citizens, with at least a further 20 permanent jobs during the 20-year operating period.
The projects will sell power to Eskom under a 20-year Power Purchase Agreement. In addition, the Koruson Main Transmission Substation will be constructed on behalf of Eskom and transferred to Eskom on completion.
Approximately 40% of the project value will comprise local content, and during operations, 1.2% of revenue generated by the projects will be applied to socio-economic development initiatives for nearby local communities.
South Africa is in a massive energy crisis. Rotational load shedding is getting worse and the cost to the economy is a massive R950 million a day. According to a report presented by the University of Capetown, if 5GW of renewable energy was rolled out before 2021, the country would not be experiencing load-shedding. Read more
Author: Bryan Groenendaal
