South Africa’s largest renewable energy project by investment, the ZAR 11.6 billion Redstone concentrated solar power (CSP) project has achieved its first debt drawdown. The African Development Bank acted as the Mandated Lead Arranger and Coordinating Bank, committing ZAR 2.306 billion to the transaction.
South African government owned development finance institution (DFI), the Development Bank of Southern Africa (DBSA) provided a commitment of R1.91 billion to the transaction, comprising R1.5billion in senior debt and R410million in equity-linked funding.
Located in the Northern Cape Province of South Africa, the Redstone project will be equipped with a 12-hour thermal storage system that will deliver clean and reliable electricity to nearly 200,000 households round the clock. Commencement of operations is scheduled for Q4 2023. Through the successful mobilisation of international project finance, Redstone CSP has facilitated approximately ZAR 7 billion in foreign direct investment to fund and support the strategic energy transition goals of the country.
Redstone’s development is led by ACWA Power, a leading Saudi developer, investor and operator of power generation projects. ACWA Power’s co-shareholders in the project include the Central Energy Fund, Pele Green Energy and the local community.
Redstone to utilise local supply chains
Redstone CSP will offset an estimated 440 metric tons of CO2 emissions per year while also providing value-adding ancillary services to Eskom, being the first renewable energy project to offer such services in the country. The project is certified under the Climate Bonds Standard and Certification Scheme and aligned with the goals of the Paris Climate Agreement which seeks to limit global warming to under 2 degrees Celsius.
In addition to efficiently delivering clean energy to the national grid, the Redstone project will also offer tangible socio-economic value through offering job opportunities and utilising local supply chains. The project will reach close to 44% local content on procurement during the construction period; create more than 2,000 construction jobs at peak, with about 400 from the local community; and create approximately 100 permanent direct jobs during the operating period.
The construction for the project is well underway and is currently in the ninth (9th) month of construction. The engineering work for the project is over 58% complete, whereas procurement and construction work stand at over 45% and 6% respectively. The tower foundation – a key construction milestone for the project has already been completed.