Saudi renewable energy developer, ACWA Power, has announced a ZAR11.6 billion financial close for the 100 MW Redstone concentrated solar power (CSP) plant in South Africa. The ZAR11.6 billion total investment for the Redstone project makes it the largest renewable energy investment in South Africa to date. The project was awarded during Bid Window 3 of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REI4P).
The Redstone CSP project secured financing from leading international and South African financial institutions including African Development Bank (AfDB), ABSA Bank, Development Bank of Southern Africa (DBSA), CDC Group, Nedbank Limited, Nederlandse FinancieringsMaatschappij voor Ontwikkelingslanden (FMO), Deutsche Investitions- und Entwicklungsgesellschaft (DEG), Investec Bank and Sanlam Life Insurance.
Paddy Padmanathan, President and Chief Executive Officer of ACWA Power commented on the occasion saying; “ACWA Power is proud to lead the energy transition in countries that are committed to ambitious renewable energy targets to support economic growth and social development. Redstone CSP adds another superlative to our budding record in South Africa, being the largest renewable energy investment to date. As grid links are improved, the ingenuity of the private sector together with the great support of experienced finance partners has the potential to spark lasting impact for local communities and address the threats of climate change.”
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. ACWA Power’s co-shareholders in the project include the Central Energy Fund, Pele Green Energy and the local community.
12 hours of energy storage
Located in the Northern Cape Province of South Africa, the Redstone plant 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.
Mr. Rajit Nanda, Chief Portfolio Management Officer and Acting CIO for ACWA Power, added: “We are proud to play a key role in supporting South Africa’s decarbonisation efforts, and are grateful to our partners for contributing to our mission to reliably and responsibly deliver power and desalinated water at an affordable cost. Following in the footsteps of the record-breaking Bokpoort CSP and deploying the same thermal salt storage system, Redstone CSP is set to be yet another ACWA Power flagship project in South Africa that directly benefits households in the area with remarkable plant performance.”
Redstone CSP will displace an estimated 440 metric tons of CO2 emissions per year. 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 socioeconomic 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.
As part of its implicit social contract, Redstone CSP will provide value-adding ancillary services required by the system operator at no cost to the local public utility Eskom, which marks a first for a renewable energy plant in the country.