SOLA Group and AREP Reach Financial Close on 200MW Solar PV with Private Off-taker in South Africa

SOLA Group, who sold 40% equity to AREP last year, will provide EPC services on the project, while global construction company WBHO will build it.

“We’re very pleased to be part of the first major utility energy project in SA for a private offtaker,” says Derek Wallace, managing director for projects at WBHO. “We are looking forward to delivering a world-class project.”

The speedy financial close marks how fast the renewable industry in South Africa is transitioning away from public sector off-taker tenders to the private sector since the country’s president, Cyril Ramaphosa, increased the embbedded generation threshold from 1MW to 100MW. Read more

The two facilities will supply electricity through wheeling arrangements with Eskom to five Tronox facilities in the Western Cape and KwaZulu-Natal for their own use.

Aerial view of Tronoxs’ Central Processing Plant at Empangeni. Image credit: Tronox

“There are significant firsts here for the renewable energy industry,” says Dom Wills, CEO of SOLA Group. “These are the first projects of this scale in SA that are based on pure private bilateral trade. It’s also a great plus for the country that these projects are 100% South African-owned, financed, constructed, operated and managed.”

Melissa Zona, Tronox Holdings senior vice-president, chief human resources and sustainability officer, comments: “This is yet another example of how Tronox is committed to being a leader when it comes to corporate sustainability and protection of the environment.

“Switching from coal-based to renewable power in SA is one of the many ways Tronox is implementing technology and best practices at our sites to protect our land, water, air and ecosystems and operate more sustainably.”

Brian Dames, CEO of African Rainbow Energy, notes: “African Rainbow Energy is a leading renewable energy platform, the largest shareholder in the SOLA Group and the funder of the two projects. This is a clear demonstration of African Rainbow Energy’s and partners, Absa, DBSA [Development Bank of Southern Africa], Nedbank and Standard Bank’s commitment to our country, the economy and our customers. This investment brings hope.”

The debt arrangement for the projects was led by PepperTree Capital, and lenders included three of the big banks in SA and the DBSA, which provided a total of R3.1 billion of debt in the project.

Looking ahead, Will says: “We hope the model of private power through bilateral agreements continues to become more widely adopted. The benefits to the end-user are competition, choice and ultimately a more diverse contribution to the power system.”

Author: Bryan Groenendaal

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