The 100 MW Redstone concentrated solar power (CSP) project demonstrates that South Africa is using modern technologies, including renewables, as it transitions to adopting clean sources of energy, says Industrial Development Corporation (IDC) CEO TP Nchocho.
After having recently reached financial close, construction on the R11.6-billion project has started. It is expected to reach commercial operation in the fourth quarter of 2023.
The lead shareholder in the project is Saudi Arabia-based developer, investor and operator of power generation and desalinated water production plants ACWA Power.
Once operational, the project is expected to provide substantial economic spin-offs to the Northern Cape economy in the form of employment opportunities, small business participation and community development.
The IDC provided funding to black-owned developer, investor and operator of renewable energy projects Pele Green Energy to form part of the equity shareholding in Redstone.
The IDC and ACWA Power have also co-funded the community’s shareholding participation in the project.
“Of significance to the IDC and in support of our transformation imperatives is that our funding to this project has been customised to ensure full unencumbered ownership to Pele well before the end of the 20-year term of the power purchase agreement (PPA) and the flow of tangible economic benefits to the community throughout the PPA term,” says Nchocho.
As in previous transactions where the IDC funded communities, it will appoint a socioeconomic development specialist to support and advise community representatives.
The IDC’s exposure in the renewable energy space is currently over R13-billion.
“We have identified several opportunities in the renewable build programme, top of which include skills and knowledge transfer and local economic empowerment through funding community trusts,” says Nchocho.
Through its funding into the energy sector, the IDC seeks to contribute to South Africa’s nascent 'just energy transition' and help improve security of energy supply in the country and the rest of the continent in support of growing economies.