Saudi energy generation and desalination company Acwa Power says construction has started on the 100 MW Redstone concentrated solar power (CSP) project after achieving financial close on the R11.6-billion project.
Acwa, which is the lead shareholder in Redstone, expects commercial operations to start in the fourth quarter of 2023.
The Redstone project is the largest renewable energy investment in South Africa to date. It will be located in the Northern Cape, and will be equipped with a 12-hour thermal storage system that will deliver clean and reliable electricity to nearly 200 000 households around the clock.
Through the successful mobilisation of international project finance, Redstone CSP has facilitated about R7-billion in foreign direct investment to fund and support the strategic energy transition goals of the country.
Acwa's co-shareholders in the project are the Central Energy Fund, Pele Green Energy and the local community.
The project has secured financing from leading international and South African financial institutions including the African Development Bank, Absa Bank, the Development Bank of Southern Africa, CDC Group, Nedbank, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden, Deutsche Investitions- und Entwicklungsgesellschaft, Investec Bank and Sanlam Life Insurance.
Redstone CSP will displace an estimated 440 t/y of carbon dioxide emissions, and is certified under the Climate Bonds Standard and Certification Scheme and aligned with the goals of the Paris Climate Agreement.
In addition to efficiently delivering clean energy to the national grid, the Redstone project will also offer tangible socioeconomic value through offering job opportunities and using local supply chains. The project will reach close to 44% local content on procurement during the construction period, create more than 2 000 construction jobs at peak, with about 400 from the local community, and create approximately 100 permanent direct jobs during the operating period.
As part of its implicit social contract, Redstone CSP will provide value-adding ancillary services required by the system operator at no cost to the local public utility Eskom, which marks a first for a renewable energy plant in the country, Acwa Power says.
“Redstone CSP adds another superlative to our budding record in South Africa, being the largest renewable energy investment to date. As grid links are improved, the ingenuity of the private sector together with the great support of experienced finance partners has the potential to spark lasting impact for local communities and address the threats of climate change,” says Acwa president and CEO Paddy Padmanathan.