Three solar photovoltaic (PV) projects bid under the much-delayed fifth bid window (BW5) of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which was implemented in 2021, have advanced to financial close.

The Grootfontein projects, which are being developed by Scatec of Norway, have a combined capacity of 273 MW and a combined investment value of R5.1-billion.

Scatec CEO Terje Pilskog described the transaction as a landmark, noting that the projects are the first solar PV projects from BW5 to have reached financial close.

“We are now looking forward to starting construction next year and achieving commercial operation in 2025,” Pilskog said in a statement.

As with all other REIPPPP projects, the solar plants will operate under a 20-year power purchase agreement.

In October 2021, the Department of Mineral Resources and Energy announced that 25 wind and solar PV projects, with a combined capacity of 2 583 MW, had been selected as preferred bidders.

Prior to Scatec’s announcement, however, only six wind projects with a combined capacity of 784 MW had reached financial close.

The department has stated previously that several other projects from the round were also being prepared for commercial close, but did not provide firm timeframes.

The solar power plants will be the first Scatec assets located in the Western Cape province, and will be financed using equity from the owners and R4.5-billion of non-recourse project finance debt provided by Standard Bank.

Scatec will own 51% of the equity in the project, with black economic empowerment company H1 Holdings, owning 46.5% and the Grootfontein Local Community Trust the 2.5% balance.

Scatec will be the engineering, procurement and construction provider and will also be responsible for operation, maintenance and asset management.

Construction is expected to begin during the first quarter of 2024.