A further two South African wind farms, with a combined investment value of R6.6-billion, have reached financial close following the signing of agreements for 27 renewable-energy projects on April 4.
Global wind and solar company Mainstream Renewable Power announced on Tuesday that construction of the 140 MW Kangnas Wind Farm, located near Springbok, in the Northern Cape, and the 110 MW Perdekraal East Wind Farm, located 80 km northeast of Ceres, in the Western Cape, should begin in June.
A consortium comprising Concor and Conco has been appointed as construction contractor, while Siemens Gamesa Renewable Energy will supply and install the wind turbines.
The projects are being developed with a consortium of equity partners including: African Rainbow Energy and Power; H1 Holdings; local community trusts; Lekela; Mainstream Renewable Power, along with a consortium of investors such as the International Finance Corporation and the Rockefeller Brothers Fund; as well as Old Mutual Life Assurance.
The debt for the projects has been arranged and led by Absa, while Simmons & Simmons and White & Case have acted as the lenders’ legal adviser. Fasken and Stoel Rives acted as the sponsor’s legal counsel. Riverside Risk Advisors advised on inflation, interest rate and currency hedging components of the financing.
The projects bring to 848 MW the total capacity of Mainstream-linked wind and solar photovoltaic projects developed in South Africa since the start of the Department of Energy’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) in 2011.
Five power plants with a combined generation capacity of almost 600 MW are already in operation and GM Hein Reyneke reports that Mainstream has a portfolio of more than 3 000 MW of South Africa wind and solar PV projects under development.
As with the other 25 projects bid during bid windows 3.5 and 4 of the REIPPPP, construction of the two wind farms had been delayed for more than two years after Eskom refused to signed further power purchase agreements (PPAs), owing to the fact that it had returned to an operating surplus.
However, the logjam was ended in April when Energy Minister Jeff Radebe presided over a signing ceremony in Pretoria, at which all the project agreements were initialled, including PPAs with Eskom.
Since then, developers and financiers have been working to prepare the projects for financial close, with several projects having breached that milestone in April and May.
On June 1, Radebe also announced that documents for the fifth REIPPPP bid window would be released before year-end for a further 1 800 MW of renewable-energy capacity.