European Investment Bank in solar plant loan deal for South Africa

Out-Law News | 11 Aug 2014 | 11:28 am | 1 min. read

The European Investment Bank (EIB) and South African utility Eskom have signed a €75 million loan agreement to support completion of a 100 megawatt solar thermal plant in Upington, in the country’s Northern Cape province.

Once fully developed, the!Ka Xu ‘concentrating solar plant’ (CSP) will collect solar energy using parabolic trough technology and convert it into electricity in the steam cycle. The plant will be able to store energy during off peak hours and release it during peak demand.

The EIB said: “CSP uses a number of innovative technologies to concentrate the sun’s energy through large mirrors and utilises the concentrated thermal energy to produce steam to drive a conventional steam turbine for electricity generation. CSP technology is similar to conventional power plants in that steam is used to power a turbine and generator, but the fossil fuel combustion is replaced with free, non-polluting solar energy.”

Eskom’s senior general manager for renewables Ayanda Nakedi said: “The potential to deploy CSP technologies on a large scale is promising, and we are pleased to have taken another step forward in funding our Upington solar plant with this loan agreement.”

EIB vice-president Pim van Ballekom said the CSP would serve as a model for similar schemes elsewhere.

The project is being co-financed with the African Development Bank, Agence Francaise de Developpement, the Clean Technology Fund, Germany’s KfW bank group and the World Bank. The EIB has also provided a total of €220m for the neighbouring ‘Ka Xu’ CSP plant.

Over the last five years the EIB provided more than €24 billion for renewable energy investment around the world.

South Africa has moved into the top 10 rankings of countries harnessing renewable energy from the sun, having connected more than half-a-gigawatt of utility-scale solar power to the national grid, according to a survey released earlier this year.

Four large scale solar plants came online in South Africa in 2014 including two 66 MW plants at Lesedi and Letatsi, developed by US-based SolarReserve and South Africa’s Intikon Energy. In June 2014, the Herbert and Greefspan project, built by the US Sunpower Corporation, also came on line. All four projects were part of the first round of South Africa’s independent power producer procurement programme for renewable energy.

Figures from South Africa’s government
(2-page / 128 KB PDF) show the country’s renewable energy programme has already attracted more than $14bn in foreign direct investment.