German industrial group Rheinmetall plans to build its first South African plant to produce photovoltaic (PV) panels for the power-deprived local market, a company executive told Reuters on Thursday.
The decline of debt-crippled state utility Eskom has this year led to the worst power cuts on record in Africa's most industrialised economy. This week most South Africans have been without power for at least six hours a day.
The outages have spurred demand for solar power systems. South Africa imported solar PV panels worth nearly R2.2-billion in the first five months of this year alone, mostly from China.
Rheinmetall's facility will have initial annual capacity to produce panels with total generating capacity of at least 500 MW, said Jan-Patrick Helmsen, CEO of the company's South African unit Rheinmetall Denel Munition (RDM).
"The reason we are doing this is to have independent local production. Energy is a strategic asset for national security," he told Reuters on the sidelines of a German-African business conference in Johannesburg.
He said it was too early to state Rheinmetall's total investment in the project, but the company hoped to launch production of panels within the next year.
South Africa requires 4 GW to 6 GW of additional production to end power cuts.
The government has relaunched a drive to attract private investment in industrial-scale renewables projects to boost production capacity. It also loosened regulations on self-generation earlier this year, removing a cap on the amount of power businesses and individuals can produce before seeking government approval.
Helmsen said Rheinmetall would initially focus on producing PV panels for industrial clients in South Africa before a possible expansion to residential customers and exports to the southern African regional market.