South Africa’s 200MW of solar hits financial close

The National Energy Regulator of South Africa (Nersa) granted permission for the construction of two 100 MW solar power plants in the North West province of South Africa back in May. Now that the projects have reached financial close, construction is set to start.

The corporate power purchase agreement was struck in March with the region’s mines and smelters, Tronox, a US-based supplier of titanium goods. Through wheeling agreements, the electricity will be delivered to five Tronox plants in the Western Cape and KwaZulu-Natal. State-owned utility Eskom will be responsible for maintaining the infrastructure needed to carry the electricity.

“These are the first projects of this scale in South Africa that are based on pure private bilateral trade. It’s also a great plus for the country that these projects are 100% South African owned, financed, constructed, operated and managed,” said Dom Wills, CEO of Sola.

For development and construction, the projects raised a total of ZAR 4 billion ($233.6 million). African Rainbow Energy and Sola collaborated to raise the money.

PepperTree Capital served as the debt manager, and the Development Bank of Southern Africa (DBSA) provided a ZAR 3.1 billion loan. Three of South Africa’s main banks—Absa, Nedbank, and Standard Bank—were among the additional lenders. According to Sola, Pinsent Masons, Hogan Lovells, Faskens, Allen & Overy, and ENS served as the transaction’s legal counsel.