South Africa to start construction of US$0.77bn wind power farms this month

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Construction works on three new South African wind farms are set to begin this month. This is after a financial close for the projects was reached for the third window bid, which is under Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

The three projects mainly located the Northern Cape will have a combined capacity of 360MW with an investment estimated to be US$0.77bn. These projects are the Noupoort wind farm with a capacity of 80mW located in Umsobomvu, Loeries fontein and Khobab with a capacity of 140mW each and are located in Namakwa.

These power generation projects will help increase the amount of renewable energy used in South Africa by 600mW, with the country apparently struggling with load shedding.

Construction will be undertaken by Murray & Roberts and Conco who have been selected as main contractors. However, Siemens will supply and install the wind turbines.

“The team is delighted with our success today. Mainstream has been awarded more megawatts than any other developer under the Renewable Energy Procurement Programme,” said Barry Lynch, Mainstream Managing Director.

Barclays Bank and the Development Bank of Southern Africa arranged for the debt of the projects. While, Bowman & Gilfillan and Simmons & Simmons were the lenders and legal advisers to the lenders in the same arrangement, being supported by Fasken Martineau and Stoel Rives – the sponsors for legal counsel.

The project is an investment by Mainstream Renewable Power, and other equity partners such as through its Actis Energy 3 Fund (an arm of Actis), as well as local community trusts. A partnership between Genesis Eco-Energy and Lereko Metier Sustainable Capital will also be a joint partner in the investment. Other companies participating as partners are Thebe Investment Corporation, Old Mutual’s IDEAS Managed Fund and Futuregrowth Asset Management.

The country has recently called for bids for construction of 500KWp photovoltaic (PV) solar plants at the upcoming Upington and Kimberley airports.