Building Energy has signed power purchase, implementation, and financial agreements with South Africa’s Department of Energy, signalling the start of construction on an 81 MWp Tracking Solar PV Plant in Kathu, Northern Cape. The plant will be one of South Africa’s largest photovoltaic projects.
In November 2011, Building Energy was selected as one of the 28 preferred bidders for the first round of the Renewable Energy Independent Power Producers Programme (REIPPP) to construct the Kathu PV Plant, which will be one of the largest of its kind in the world.
Matteo Brambilla, Building Energy Africa CEO, notes, “South Africa has created a modern and efficient framework for renewable energy, kick starting one of the most vibrant markets in the world. As a leading global renewable energy company we are proud of our accomplishments in the country and recognize the dedicated team and various independent parties that helped to deliver this successful outcome. The Kathu solar park is one of the largest solar projects with tracking system technology worldwide.”
Commenting on the country’s energy profile and on Building Energy’s role, Brambilla continued, “Today, South Africa is experiencing a strong demand for renewables, as they can be installed quickly as well as being cost-competitive and a reliable source of power. Building Energy’s ability to finance the construction of the park through non recourse project finance underscores the strong appeal of predictable cash flows from Solar technology and utility-scale project execution expertise.”
In mid 2011, Building Energy acquired the rights to the project from a local developer and acted as the sole sponsor up to the financial close. Building Energy, together with Mandated Lead Arranger and Bookrunner, Rand Merchant Bank (a division of FirstRand Bank Limited), were responsible for structuring the project finance and attracting both local and international equity investors for the project to a value of over R3 Billion. Shareholders in the project company include Old Mutual’s IDEAS Fund (managed by Old Mutual Investment Group) and the African Infrastructure Investment Fund 2 (exclusively advised by African Infrastructure Investment Managers, a partnership between Macquarie Group of Australia and Old Mutual Investment Group.)
Building Energy, in joint venture with WBHO (Pty) Ltd, will be responsible for the construction of the plant. Building Energy will operate the plant, in joint venture with the Guma group, for a period of 20 years. “The Kathu Solar PV Plant will generate clean, renewable energy to power thousands of homes in South Africa while also delivering sustainable economic and social benefits through the Kathu Solar Community Trust,” says Brambilla.
Construction of the Kathu Solar PV Plant will commence immediately and is scheduled to be completed in May 2014.
Building Energy is developing a high quality pipeline of over 500MW in Sub-Saharan Africa. The pipeline includes both utility scale ground mounted and rooftop plants, as well as solutions for large industrial users and mines.
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