South African state company Eskom has secured a US$365-million (about R2.46-billion) loan from the African Development Bank to fund construction of a concentrated solar power plant at Upington in the Northern Cape and a wind farm near Koekenaap in the Western Cape.
According to a statement by the African Development Bank (AfDB), the financial package includes $265-million from the bank’s own reserves, as well as a $100-million concessional loan from the Clean Technology Fund.
The loan, which was concluded under the South African Government Guarantee for Eskom’s debt, is for 40 years.
Apart from providing financing, AfDB will also transfer critical knowledge of how to design and manage wind and solar energy projects to South African experts, enabling the country to take a major step towards an economy powered by cleaner energy.
“Eskom is committed to reducing its carbon footprint,” Eskom CEO Brian Dames told BuaNews. “This is an exciting time in the company’s history with its first large-scale introduction of two critically important renewable energy projects in its fleet.”
These projects respond directly to South Africa’s need for more energy and to diversify its energy mix, gradually increasing the weight of clean energy to 42% by 2030 as anticipated in South Africa’s Integrated Resource Plan, released earlier this year.
Emission savings are estimated at about 5-million tons of CO2 equivalent – over a 20-year life span – for the Sere wind power project and 9-million tons for the Upington solar power plant.
“In addition to the tremendous environmental benefits, the project will have a positive impact on job creation,” the AfDB said.
It is expected that the project will lay the foundation for a future fleet of power plants by demonstrating solar field and power plant technology.