SolarReserve, a U.S.-based solar energy developer has succeeded in closing a $586 million equity and debt round of financing for two South African clean-energy projects.
To raise the funds for the projects, SolarReserve joined forces with the Kensani Group, a South African financial advisory firm, and Intikon Energy, a South African developer of renewable energy.
The projects, Letsatsi and Lesedi, are based in the Free State and the Northern Cape respectively, and were selected in first round bidding by the South Africa Department of Energy as part of the Renewable Energy Independent Power Producer Procurement Program (REIPPPP).
In a statement, the company revealed that the projects will kick off in mid 2014 and will provide electricity to Eskom Holdings, South Africa’s state-owned utility, for 20 years. Jointly, the projects will cost almost $600 million, making these two of the largest project finance transactions ever completed in South Africa, and among the largest renewable energy projects in Africa.
“Kensani applauds the South African government’s large scale commitment to clean energy, and celebrates the exciting opportunities for empowering our rural communities,” said Kelley Starke-Dow, CEO of Kensani in an emailed statement. Kensani participated in the equity portion of the funding round.
The hope is that the project will result in 600 construction jobs and 100 permanent operational jobs for South Africans. The project leads will set aside a percentage of total project revenues for enterprise and socio-economic development, amounting to a total of approximately $59 million, which will be invested back into the local community.
According to SolarReserve, a California-based company, FirstRand Bank led the debt funding for the projects.