14 November 2013, Johannesburg – US firm SunEdison has secured R1.8-billion (US$185-million) in development finance for for the 60 megawatt (MW) Boshof Solar Park project in South Africa’s Free State province.
The loan secured from the Overseas Private Investment Corporation, the development finance institution of the US government, will cover 75% of the R2.4-billion cost of the project, SunEdison said in a statement on Wednesday.
The project falls under the South African government’s renewable energy programme for independent power producers, which aims to add 17 800 MW from renewable sources to the country’s energy mix by 2030.
Last week, the government announced a third round of preferred bidders for the programme, adding 17 new projects to the 47 renewable energy projects already approved in the first and second rounds of bidding. Together, the 64 projects will bring around R180-billion in investment into South Africa, and add in the region of 3 800 MW to the country’s national electricity grid.
Significant South African shareholding
The Boshof Solar Park project, which was approved in the second round of bidding, stands out as the first project in programme that will be supplied by a South African majority-owned photovoltaic (PV) module manufacturer.
SunEdison owns 51% of the project, with the remainder owned by South Africa’s Public Investment Corporation (19%), Nehawu Investment Holdings (20%), and a community trust administered by Kurisani, the investment arm of loveLife (10%).
According to SunEdison, about 50% of the project’s total value will go to South African service providers and manufacturers supplying local components, including the SunEdison AP90 Single Axis trackers that will be locally manufactured for the project. Total procurement from black economic empowered entities is estimated at R685-million ($67.9-million).
The company said the project was expected to create around 280 jobs during its construction and operational phases, while supporting over 1 000 additional jobs through the use of local sub-contractors.
In addition, the company said, over R200-million ($19.7-million) had been set aside for projects “that will transform the community by improving access to education and healthcare, supporting enterprise development and other projects to improve the quality of life for residents throughout the Free State and Northern Cape”.
SunEdison vice-president Pashupathy Gopalan said Boshof was “a landmark project which will benefit the entire South African economy as it contributes to energy security and creates green jobs throughout the value chain”.
The Boshof project is SunEdison’s third in South Africa’s renewable energy programme for independent power producers. SunEdison said on Wednesday that construction was under way the other two projects, the 28 MW Soutpan plant and the 30 MW Witkop plant, both located in Limpopo province.