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Enel Green Power RSA, the Enel Group’s South African renewables company, has signed project financing agreements a portfolio of five new wind projects, totalling roughly 700 MW of capacity.
The company has secured up to EUR950 million (US$1.1 billion), 80% of the overall investment of around EUR1.2 billion (US$1.39 billion), from senior lenders Nedbank and Absa.
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 EUR230 million (US$267.3 million) in equity in the construction of the five wind farms. Now that financial close has been achieved, construction of the first project, Nxuba, is expected to start by the end of 2018.
The Garob, Karusa and Soetwater projects are located in the Northern Cape province of South Africa, while the Oyster Bay and the Nxuba wind farms will be built in the Eastern Cape province.
Following the start of construction of Nxuba, construction of Oyster Bay and Garob is expected to start by the first half of 2019 and construction of Soetwater as well as Karusa is expected to start in the second half of the same year.
Nxuba is expected to be operational in the second half of 2020, Oyster Bay in the first half of 2021, while Garob, Soetwater and Karusa in the second half of 2021. By 2021, all five new wind farms are due to be up-and-running, bringing Enel Green Power’s total installed capacity in the country to more than 1.2 GW.
Once operational, the five projects are expected to produce around 2.6 TWh each year, saving the annual emission of roughly 2.7 million tonnes of CO2 into the atmosphere.
The five wind farms were all awarded in round 4 of the South African government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). Despite being awarded in April 2015, the power purchase agreements (PPAs) were not signed until April this year. The three-year delay was caused by many obstacles, including including refusal by the national power utility Eskom and legal challenges.
This project thus joins many other REIPPPP projects that have reached financial close since the signing, including a 258 MW solar portfolio in Upington, 147 MW Roggeveld wind farm in the Karoo region, 110 MW Perdekraal East wind project in Western Cape and 25 MW Ngodwana biomass project in Mpumalanga.
Each project is minority-owned by a local partner, as mandated in the auction round.