SolarAfrica's ambitious project signals a noteworthy step in the nation’s shift towards renewable energy.
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SolarAfrica has announced a R1.8 billion investment into the development of its flagship utility-scale solar project, SunCentral.
The company has successfully reached financial close on the first 114 megawatt (MW) component of the project alongside funding partners Investec and RMB. The investment into SunCentral marks the start of the project’s rollout in South Africa.
SunCentral is a large-scale solar photovoltaic (PV) plant in the Northern Cape province, located between Hanover and De Aar.
The project will be developed in three phases.
Phase 1, consisting of 342 MW, will be delivered through a staged roll-out of three 114 MW facilities. This phase will deliver renewable energy to a diverse range of off-takers by wheeling it through SA’s power grid.
Phase 2 and 3 will increase the capacity of SunCentral to 1 gigawatt (GW).
This project from SolarAfrica will offer wheeling on a one-to-many basis, making it available to a wider pool of businesses in the country.
Charl Alheit, Chief Investment Officer, SolarAfrica said: "Reaching financial close on the first 114 MW of our utility-scale wheeling development and Main Transmission Substation (MTS) investment marks a significant milestone in our commitment to advancing sustainable energy solutions for our customers in the commercial and industrial sectors."
He added that the substantial size of SunCentral gives businesses access to cheaper, greener power across the country.
"We are excited to see this project move forward as we continue contributing to the energy transition while delivering long-term value to our customers," Alheit said.
SolarAfrica is a part of the Starsight Energy Africa Group. The success of SunCentral will act as a blueprint for similar (and possibly smaller) off-site generation projects in other key African markets in which the Starsight Energy Africa Group companies operate.
"The construction of SolarAfrica’s SunCentral is a critical step in our journey to expand clean energy adoption across Sub-Saharan Africa," Paul van Zijl, Group CEO, Starsight Energy Africa Group said.
"We are excited to move this project forward and continue delivering long-term value to our customers."
SolarAfrica is backed by world-class investors African Infrastructure Investment Managers (AIIM) and Helios Investment Partners who both hold track records of bringing investment to support African innovation.
Thor Corry, Investment Director, AIIM said that reaching financial close on the first 114 MW on SunCentral is a major milestone for SolarAfrica.
"The modular approach to construct the MTS and plug in subsequent 114 MW modules provides a superb platform for SolarAfrica to scale at pace to meet the needs of the C&I customers in South Africa who want to secure price certainty and cost efficiencies while furthering South Africa’s Just Energy Transition," Corry said.
"With South Africa requiring up to 30 GW of new capacity by 2030 to meet its climate commitments and energy needs, projects like this are crucial."
The Minister of Finance Enoch Godongwana intends to allocate more than R219.2 billion towards SA’s green energy and the huge investment is targeted at improving infrastructure in the sector.
Godongwana was set to deliver his Budget Speech this past week. It was postponed after Cabinet ministers in the Government of National Unity (GNU) failed to reach consensus on the matter of Treasury’s 2% increase on Value Added Tax (VAT). This would have increased the VAT rate to 17%.
Treasury has released the Budget Speech that was not delivered, but they have said senior officials in the Treasury would not comment on the documents until the new Budget Speech is delivered next month.
In terms of funding, government has allocated more than R1 trillion for infrastructure development over the next three years.
This will be spent on different projects, including:
- R402 billion for transport and logistics
- R219.2 billion for energy infrastructure
- R156.3 billion for water and sanitation.
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