Enel, Green Power RSA (“EGP RSA”), the Enel Group’s South African renewables company, signed with senior lenders Nedbank Limited and Absa, all project financing agreements for up to US $1.1bn, namely up to 80% of the overall investment of around US $1.3bn on a portfolio of five new wind projects, totalling roughly 700 MW of capacity. The five facilities, namely Nxuba, Oyster Bay, Garob, Karusa and Soetwater, have a capacity of around 140 MW each. The Enel Group is contributing around US $266m in equity in the construction of the five wind farms. Following the signing of the agreements, also known as “financial close”, construction of the first project, Nxuba, is expected to start by the end of 2018.
Once complete the wind farms will provide South Africa with 700 MW of renewable energy capacity, enough to power hundreds of thousands of homes.
The scheme for bringing forward new renewable energy capacity, called REIPPPP, is part of a government push to install 7,000 MW of clean power by 2020.
Three of the wind farms will be constructed in the Northern Cape; South Africa’s largest region is a popular destination for renewable projects due to its dry and largely flat landscape. All five wind farms are planned to be operational by 2021, helping to reduce an estimated 2.7 million tonnes of carbon dioxide each year.
Antonio Cammisecra, head of Enel’s global renewable energy department, said the decision was an important milestone which confirmed the company’s “continuing commitment to the country’s renewables sector, within a context of sustainable development.”
“Enel Green Power will be supporting these processes by generating its emission-free energy in partnership with local shareholders and in cooperation with the local communities, according to our long-term vision of shared value creation,” he added.
At the moment, Enel operates 520 MW of wind and solar projects across South Africa. The new wind farms will help to more than double this capacity, underlining the company’s view of the country as an attractive destination to do business.