Enel Global Renewable Energies’ Enel Green Power (EGP) division, in Southern Africa, has reached financial close on five new wind farms with capacity of about 700 MW.
The five wind farms – Nxuba and Oyster Bay, in the Eastern Cape, and Garob, Karusa and Soetwater, in the Northern Cape – have capacity of about 140 MW each, and were all awarded in Round 4 of government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
Each project is minority-owned by a local partner.
The total investment value is about €1.2-billion, of which Enel will contribute about €230-million in equity for the construction of the wind farms, and the balance of €950-million will be contributed by senior lenders Nedbank and Absa.
Led by Norton Rose Fulbright banking and finance head Jackie Midlane, the law firm advised Enel on a range of issues related to this form of financing, including the structuring and negotiation of the finance documents.
Norton Rose Fulbright also assisted with the structuring, drafting and negotiation of 35 project contracts with numerous counter parties, which included, but were not limited to, contracts and agreements relating to the supply and installation of wind turbines and connected equipment.
The law firm also advised on the structuring, drafting and negotiation of intergroup contracts and agreements with the minority stakeholders in the five special-purpose vehicles, including local partners Pele Energy and Khana Energy and trusts formed by local communities.
“Following our work for EGP in relation to Round 3 of South Africa’s REIPPPP, we are delighted to have assisted EGP on the successful completion of this innovative and complex transaction,” Midlane commented in a separate statement.
Working across several jurisdictions and under a very tight timeframe, she highlighted that Norton Rose Fulbright had helped EGP implement a first-of-a-kind financing structure, which would support the growth of its business and investments in Africa.
Following the financial close, construction of the first wind farm, Nxuba, is expected to start by the end of this year. It is expected to be operational in the second half of 2020.
Construction of the Oyster Bay and Garob wind farms is expected to start by the first half of 2019, while construction of Soetwater and Karusa will start in the second half of 2019.
Oyster Bay will become operational in the first half of 2021, with Garob, Soetwater and Karusa following suit in the second half of 2021.
By 2021, all five new wind farms are due to be up and running, bringing EGP’s total installed capacity in the country to more than 1.2 GW.
Once operational, the five projects are expected to produce about 2.6 TWh/y, saving about 2.7-million tonnes of carbon dioxide emissions every year.
EGP head Antonio Cammisecra said the company had “reached an important milestone in South Africa by achieving financial close on five major wind projects, which confirm [the company’s] continuing commitment to the country’s renewables sector, within a context of sustainable development”.