- Harmony Gold Mining Company Limited (“Harmony”) has concluded a power purchase agreement (“PPA”) facilitating the construction of three solar photovoltaic plants totalling 30MW in the Free State as Phase 1 of its renewable solar photovoltaic (“PV”) energy initiative.
- In Phase 2, the Company will be building an additional 137MW of renewable energy at our various longer-life mines while Phase 3 is in planning stage and progressing as anticipated.
- Harmony expects Phase 2 of its renewable energy project to deliver over R500 million per annum in electricity cost savings once it reaches full production in FY25.
“The ESG-linked financial transactions that we have concluded, alongside the construction of the solar energy plants, are a watershed moment for Harmony and our host communities. Not only will these transactions help us to deliver on our environmental and social obligations and undertakings, but they will also de-risk the business and deliver many socio-economic benefits. ‘Mining with purpose’ is ensuring that our investors and other stakeholders continue to derive value and positive returns in a global climate of energy uncertainty,” said Peter Steenkamp, Harmony Gold CEO.
In Phase 1 of Harmony’s decarbonisation strategy, the Company has established an independent power producer (“IPP”) for the construction of the three PV plants. These plants will have a total installed capacity of 30MW and will deliver more than 68 gigawatt hours (“GWh”) of clean power to Harmony’s Free State operations, mitigating 65 000 tonnes of carbon dioxide emissions in their first 12 months of operation. 1.3 terawatt hours (“TWh”) of clean energy is expected to be delivered over their 20-year lifespan.
The solar plant projects were jointly developed by Harmony, Energy Group (a specialist advisor and investor in industrial clean energy projects in Southern Africa), and BBEnergy (a South African engineering company that specialises in solving complex engineering problems in the energy and water fields).
The project was funded by a project finance debt solution from Rand Merchant Bank, a division of First Rand Bank Limited, and with the support of African Clean Energy Developments (ACED), equity-funded by African Infrastructure Investment Managers and Mahlako Energy Fund.
The plants rank amongst the biggest solar PV plants for private offtake in South Africa to date and first energy is expected to flow from the plants in March 2023.
Harmony has also concluded a new syndicated multi-tranche, multi-currency, loan facility, aimed at sustainable development of US$400 million and R4 billion.
Harmony’s goal is to be net carbon zero by 2045. Phase 1 and 2 of Harmony’s renewable energy programme are key interventions, supported by science-based targets, as the Company journeys towards this ambition.
Author: Bryan Groenendaal