Photo by: Duane Daws
Technology group Abengoa has announced that $660-million in project financing has been secured for the 100 MW Xina Solar One project – a parabolic-trough concentrated solar power (CSP) project, with five hours of thermal energy storage capacity, being built in South Africa’s Northern Cape.
The total investment in the Xina project is expected to be $880-million.
The project is being pursued in partnership with the Industrial Development Corporation (IDC), the Public Investment Corporation and the Kaxu Community Trust, and is the Spanish group’s third South African CSP project. Abengoa has a 40% stake in the ownership consortium.
Earlier this month, the consortium officially inaugurated the 100 MW KaXu Solar One power plant, located alongside the Xina project site, near Pofadder. In addition, an Abengoa-led consortium is building the 50 MW Khi Solar One power-tower project, near Upington in the same sun-drenched province.
The $660-million non-recourse project financing agreements, Abengoa says, combine funding from development financial institutions such as the African Development Bank, the International Finance Corporation, IDC and the Development Bank of Southern Africa, with local investment banks such as Absa, Nedbank and Rand Merchant Bank.
A 20-year power purchase agreement has already been signed with Eskom, after the selection of Xina as a preferred project during the third bidding round under South Africa’s Renewable Energy Independent Power Producer Procurement Programme.
Abengoa says the location of Xina alongside KaXu, the first CSP plant to enter commercial operation in South Africa, will form the “largest solar platform in sub-Saharan Africa”.
The five-hour thermal energy storage system, which uses molten salts, will also mean that the electricity produced by the plant can be dispatched after sunset to assist South Africa in meeting its evening-peak demand.