Development finance institution (DFI) the African Development Bank (AfDB) has approved a $57.67-million loan to State-owned Eskom to harness battery storage technology that will increase electricity generation from reliable and efficient renewable energy sources.
The funding, a concessional loan, will come from the Clean Technology Fund – a multi-donor trust fund under the Climate Investment Funds.
Eskom’s pioneering Battery Energy Storage Systems (BESS) project is being co-financed with the World Bank and the New Development Bank.
The project involves the development of 200 MW of battery storage with four hours of energy storage capacity daily, or 800 MW in total, at seven sites in the Western Cape, the Northern Cape, the Eastern Cape and KwaZulu-Natal.
Once on stream, Eskom will be able to dispatch electricity sourced from variable renewable energy that would otherwise have been wasted, reducing reliance on fossil fuel-generated electricity at peak times of the day, the DFI notes.
“The approval of the Climate Technology Fund facility reflects the AfDB’s strong commitment to support South Africa’s just energy transition plans, prioritising investment in new low-carbon generation capacity and new technologies such as battery storage.
“This comes at a critical moment as the world is gearing up for action at COP26,” says AfDB renewable energy and energy efficiency acting director Dr Daniel Schroth.
The large utility-scale BESS project, the first of its kind in Africa, is expected to help decrease carbon dioxide emissions in South Africa by as much as 0.292-million tonnes.
It will also inform the roll-out of similar projects across the continent, the AfDB points out.
The $5.4-billion Clean Technology Fund promotes low-carbon technologies. The AfDB has been an implementing entity of the Climate Investment Funds since 2010.