Absa has been appointed as the lead arranger, senior lender and hedge provider for a multi-billion rand Concentrated Solar Power (CSP) tower project in the Northern Cape.
The bank said that the 100MW R11.6 billion project is being developed by ACWA Power of Saudi Arabia, and forms part of the South African Renewable Energy Independent Power Producers’ Procurement Program (REIPPPP).
A CSP tower plant generates solar power using mirrors, known as heliostats, to concentrate a large area of sunlight onto a small area known as the receiver. Electricity is then generated when the concentrated light is converted to solar thermal energy.
Shaun Moodley, Resource & Project Finance executive at Absa, said the Redstone CSP Project will be built about 30km east of Postmasburg in the Northern Cape. The project will be one of the largest renewable energy investments in South Africa under the REIPPPP.
Moodley said Absa will participate in the overall senior debt financing package with approximately R1.5 billion of senior debt term facilities for the project.
“An important feature of the Redstone CSP Project is that it will have 12 hours of full-load energy storage which will enable the CSP power plant to reliably deliver a stable electricity supply to more than 200,000 South African homes during peak demand periods, even after the sun has set,” he said.
Moodley said at least 2,000 direct jobs will be created during the construction phase, of which 400 jobs will directly benefit the local community, while over 560 jobs will be created over a period of time once the power plant is fully operational.
Moodley said the socio-economic benefits of the project will also extend beyond job creation, because up to 40% of the required equipment and materials has to be procured locally.
Construction will take about 33 months and thereafter the power plant will be progressively commissioned to eventually reach 100% of design capacity, which should be finally achieved over 365 consecutive days within a three-year period after the commercial operations date.