The renewable energy company Enel Green Power (EGP), a subsidiary of Italy’s largest utility Enel, has received a loan of €160 million to pay for a wind farm it plans to build in the Eastern Cape, South Africa.
KfW IPEX Bank GmbH, the export finance unit of Germany’s state-owned development lender KfW, provided the loan for Enel to construct the 111MW Gibson Bay wind farm that will comprise 37 turbines of 3MW each. The plant will be capable of generating about 420GWh of power a year.
The loan, secured by a parent company guarantee from Enel Green Power, is the first granted by KfW IPEX-Bank to the Enel Green Power Group. KfW IPEX is a unit of Germany’s development bank and is a regular financier of renewables projects around the world. The agreement will provide EGP RSA with two separate lines of financing, with maturities of 7 and 17 years respectively, bearing an interest rate in line with the market benchmark.
Enel’s solar plans in South Africa
In addition to the Gibson Bay wind farm, EGP has begun construction on three photovoltaic plants in South Africa:
Aurora (Northern Cape Province)-With an installed capacity of 82.5MW, the photovoltaic plant will be capable of generating over 168GWh per year. This output corresponds to the annual energy needs of around 53,000 South African households and will cut carbon emissions by 153,000 tons every year.
Paleisheuwel (Western Cape Province)-With an installed capacity of 82.5MW, the plant will be capable of generating over 153GWh per year- equivalent to the energy needs of around 48,000 South African households, thereby cutting emissions by 140,000 tons each year.
Tom Burke (Limpopo Province)-With an installed capacity of 66MW, the plant will be capable of generating up to 122GWh per year. This output is equivalent to the energy needs of around 38,000 South African households and will cut emissions by 111 thousand tons each year.
Enel recognises South Africa’s renewables potential
The energy generated by these new power plants will be sold to South African utility Eskom through power supply agreements EGP has entered into with the utility. EGP was awarded this right in the third phase of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) tender held by the South African government in October 2013. In the same tender, in addition to the three above mentioned projects, Enel Green Power was also awarded the right to build the 82.5MW Pulida photovoltaic park (near Kimberley) , the aforementioned 111MW Gibson Bay wind farm, as well as the 88MW Cookhouse/Nojoli wind farm(near Bedford, Eastern Cape).
In South Africa, Enel Green Power owns and operates the Upington solar power plant, with an installed capacity of 10MW.
South Africa has a high level of renewable energy potential and presently has in place a target of 10,000GWh of renewable energy. The government is aiming for 3,725MW renewable energy which is broadly in accordance with the capacity allocation in the Integrated Resource Plan (IRP) 2010-2030. The procurement programme has been designed with the aim of contributing towards the country’s renewables target and towards socio-economic and environmentally sustainable growth.
Considering South Africa’s considerable renewable energy potential, the development of renewables projects represent a positive step forward, and will go far towards helping the country reduce its escalating energy expenses, thereby reducing its high dependence on fossil fuels for electricity.