Cape Town - Last week, Kathu Solar Park held a ground breaking ceremony in the Northern Cape.
The Kathu 100 MW Concentrated Solar Power project is jointly owned by ENGIE (48.5%), the Public Investment Corporation (PIC), on behalf of the Government Employees Pension Fund (GEPF) (17.5%), the SIOC Community Development Trust (12.5%), the Lereko Metier REIPPP Fund Trust (LMRF) (11.5%), Investec Bank Limited (7.5%) and the Kathu LCT Trust (2.5%).
Kathu Solar Park was awarded preferred bidder in the 3.5 round of the Renewable Energy Independent Power Producer Procurement Program (REIPPPP) led by the South African Department of Energy (DOE). In May 2016, Kathu Solar Park signed a 20-year Power Purchase Agreement (PPA) with Eskom.
The PPA signing makes it possible to start construction which is expected to be completed in the fourth quarter of 2018.
The project is funded by a mix of debt and equity. The debt is funded from a club of South African banks, namely Rand Merchant Bank, Nedbank Capital, ABSA Capital, Investec and the Development Bank of South Africa.
It is estimated that the Kathu Solar Park will save six million tonnes of carbon over 20 years and will further promote local economic development through various projects as part of its economic development objectives. This includes sourcing of certain services from local entrepreneurs in the John Taolo Gaetsewe District Municipality situated in the Northern Cape, the commitment to spend part of turn-over of the project on qualifying social and economic development once operational and having the local community benefit through the community trust which has an indirect equity stake in Kathu Solar Park.
“With Investec as one of the initial developers, it was particularly pleasing for us to see the project progress through early development and financing to the construction phase. In an important time for REIPPP and IPPs it is especially encouraging to see a project of this magnitude, using young technology getting to this significant milestone,” said Investec’s Andre Wepener.
The Acciona and SENER consortium was appointed as EPC Contractor by Kathu Solar Park to provide engineering, procurement and construction services for the project. Construction started on site in May 2016 and is due for completion in the fourth quarter of 2018. Approximately 500 jobs, with a peak of 1200, will be created during the construction phase.