IPPToday #227: Mainstream achieves financial close of US$520 million wind farms in South Africa
- Mainstream Renewable Power
- Absa Bank
- Simmons & Simmons
- White & Case
- Stoel Rives LLP
- Siemens Gamesa
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Mainstream Renewable Power has announced the successful completion of financial close for two wind projects in South Africa: the 140 MW Kangnas wind farm, located near Springbok in the Northern Cape, and the 110 MW Perdekraal East wind farm, located 80km northeast of Ceres, in the Western Cape.
The wind farms represent an investment of approximately ZAR6.6 billion (US$520.5 million) and are expected to commence construction in June 2018. The consortium of Concor and Conco has been appointed as construction contractor and Siemens Gamesa Renewable Energy will supply and install the wind turbines.
The debt for the projects has been arranged and led by ABSA. Simmons & Simmons and White & Case acted as Lenders’ Legal Advisor. Fasken and Stoel Rives acted as Sponsor Legal Counsel.
The wind farms are scheduled to begin operating in 2020. Mainstream projects that they will stimulate ZAR1.1 billion (US$86.7 million) community investment over their 20 year lifetime.
Contracts for the projects were awarded by the Department of Energy in South Africa under the fourth round of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) in June 2015.
The extended delay to financial close and start of construction is due to the repeated postponing of the signing of power purchase agreements (PPAs) for the projects procured in that bidding round. As reported on this platform, the signing finally took place in April.
The Kangnas and Perdekraal East wind farms bring the total capacity awarded to Mainstream under the REIPPPP, which was launched in 2011, to 848 MW, making the company the programme’s most successful bidder.
Mainstream has already delivered five wind and solar PV plants with a combined generation capacity of almost 600 MW into commercial operation through the programme, and has bid to develop new wind and solar PV projects under the Expedited Round (4x), the results of which are expected to be announced shortly.
Furthermore, the company may soon announce plans for more projects in South Africa, given that the Energy Minister announced earlier this week that a fifth bidding round of the REIPPPP will open in November.