Eskom has signed a €100 million loan agreement for the funding of the 100 MW concentrating solar power plant.
Eskom and Agence Française de Développement (AFD) agreed to facilitate the signing of a €100 million (R1.3 billion) credit facility agreement, which will go towards financing Eskom’s 100 MW Concentrating Solar Power (CSP) plant near Upington, Northern Cape.
CSP comprises a family of technologies that concentrate the sun’s energy through large mirrors and utilises that concentrated thermal energy to produce steam to drive a conventional steam turbine for electricity generation. The technologies are similar to conventional power plants in that steam is used to power a turbine and generator, but the fossil fuel combustion is replaced with free, non-polluting solar energy.
Eskom chief executive Brian Dames said, “CSP is one of Eskom’s first utility scale projects outside of the existing hydro portfolio and it puts us on a path towards reducing our carbon footprint and investing in a sustainable energy future.”
This CSP project is expected to deliver an annual energy production of 525 GWh and will be sufficient to power 200 000 homes.
“The leveraging of finance from institutions like AFD will contribute to the country’s low carbon trajectory and commitment to climate change. The CSP project will pave the way for industrial development and job creation by promoting the localisation of this technology. This further cements our relationship with the AFD and we are delighted to journey with this institution as we deliver on our mandate,” said Ayanda Nakedi, Eskom’s senior general manager for renewables.
The AFD is co-financing the CSP plant together with the African Development Bank, Clean Technology Fund (CTF), European Investment Bank (EIB), KfW (a public law institution existing under the laws of the Federal Republic of Germany) and the World Bank.
Speaking about Eskom’s relationship with the AFD, Eskom’s acting chief financial officer Caroline Henry said: “The AFD is a valued partner and has been a key contributing factor to the progress we’ve achieved at both the Upington CSP plant and Sere wind farm. In total, the AFD has concluded €200 million in credit facility agreements, which has gone towards these two renewable energy projects.”
In 2011 Eskom and AFD signed a €100 million loan facility for the financing of the Sere wind farm near Vredendal in the Western Cape.