A solar thermal electricity project to supply South Africa’s power provider, Eskom, has secured a total of $660 million in non-recourse project financing. The 100MW Xina Solar One power plant will supply electricity to Eskom under a 20-year power purchase agreement signed in late 2014. It will serve more than 95,000 households and will prevent the emission of 348,000 tonnes of carbon dioxide a year.
The agreements combine financing from a mix of development financial institutions and local banks: the African Development Bank, the International Finance Corporation, the Industrial Development Corporation, the Development Bank of Southern Africa, Absa, Nedbank and Rand Merchant Bank.
Xina Solar One is 40 percent-owned by Spain’s Abengoa. Its other owners are the South African Industrial Development Corp (IDC), Public Investment Corp (PIC) and KaXu Community Trust.
With a total investment of about $880mn, construction of Xina Solar One started in 2014. The plant is located close to Pofadder, in the Northern Cape province, next to KaXu Solar One, the first STE power plant in commercial operation in South Africa. The two 100MW plants together form the largest solar platform in sub-Saharan Africa, helping South Africa meet its ongoing energy demands and contributing to grid stability by dispatching clean electricity.
The two projects, along with Khi Solar One (50 MW), under advanced stage of construction, are part of the department of energy of South Africa’s independent power producer programme. Its strategy is to introduce up to 17,800MW of renewable energy into the country by 2030 and reduce its dependence on fossil fuel.