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Harmony is targeting to become net zero by 2045.

Investment & Finance

Harmony secures R10.2bn to build a portfolio of solar energy projects

The funding will see the gold producer build 30 MW of solar energy farms in Phase One of its decarbonisation strategy, and 137MW of renewable energy plants in phase two.

South African gold producer Harmony Gold, has secured R10.2bn from a syndicate of local and foreign lenders to build a portfolio of solar photovoltaic plants to power its mining operations. The projects are part of Harmony’s three phased decarbonisation strategy, the company announced this week.

The funding will see the gold producer build three 10 megawatts (MW) solar energy plants in Phase One of its decarbonisation strategy, which will supply power to its Free State mining operations. In Phase Two of the strategy, the company is planning to build an additional 137MW of renewable energy to power its various longer-life mines. 

The syndication for the loan facility was led by ABSA Bank Limited (through its Corporate and Investment Banking Division), and Nedbank Limited (through its Corporate and Investment Banking Division), and other local and international banks and financial institutions.

“The ESG-linked financial transactions that we have concluded, alongside the construction of the solar energy plants, are a watershed moment for Harmony and our host communities,” said Peter Steenkamp, the CEO of Harmony Gold.

“Not only will these transactions help us to deliver on our environmental and social obligations and undertakings, but they will also de-risk the business and deliver many socio-economic benefits. ‘Mining with purpose’ is ensuring that our investors and other stakeholders continue to derive value and positive returns in a global climate of energy uncertainty,” Steenkamp added.

Decarbonising Harmony

Harmony says Phase 3 of its decarbonisation strategy is in the planning stage, and is progressing as anticipated. The gold producer expects Phase 2 of its strategy to deliver over R500 million per annum in electricity cost savings once the renewable energy projects reach full production in FY25.

Harmony revealed that it established an independent power producer (IPP) company for the construction of the three 10MW PV plants during the first phase of its strategy. Rand Merchant Bank, African Clean Energy Developments (ACED), African Infrastructure Investment Managers and Mahlako Energy Fund provided finance for the projects through a mixture of debt and equity.

The Free State solar facilities will deliver more than 68 gigawatt hours (GWh) of clean power to Harmony’s mining operations, mitigating 65 000 tonnes of carbon dioxide emissions in their first 12 months of operation. Around 1.3 terawatt hours (TWh) of clean energy is expected to be delivered over their 20-year lifespan.

South African engineering company, BBEnergy, and specialist advisor and investor in industrial clean energy projects in Southern Africa, Energy Group, co-developed the projects together with Harmony Gold. 

According to Harmony, its goal is to be net carbon zero by 2045. The company says Phase 1 and 2 of its renewable energy programme are key interventions in its journey towards this ambition.

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