The U.S. Export-Import (Ex-Im) Bank will support up to $2 billion in renewable energy projects South Africa. The bank signed a declaration of intent with Industrial Development Corp. of South Africa Ltd. The projects will help South Africa in its efforts meet its Integrated Resource Plan and the South African Renewable Initiative, which calls for, among other things, for 4 gigawatts of solar power.
This is the first time the Ex-Im Bank will support renewable energy projects in South Africa. Under the agreement the bank will aide in financing up to $2 billion worth of U.S. technologies, products and services to South Africa’s energy sector, with an emphasis on clean-energy development, according to the bank. It’s much akin to previous agreements the bank has made with other countries to support the export of U.S. solar and wind technologies, among others, to countries—like India—wanting to invest in renewable energy and expand their energy infrastructure. The partnership will help support U.S. manufacturing jobs.
“This is basically putting the money on the table and saying this is available. We want to put that money on the table and say bring us to sales,” said Ex-Im Bank spokesperson Phil Cogan. As such actual projects the funds will support will come later.
“I can’t say what percentage will be e solar and what percentage will be other renewable energy,” Cogan said. However, under the agreement the funds will largely go to support wind, solar and hydro not natural gas.
The bank has developed special products for the renewables industry, which capitalize on their long operational and payback periods, according to Cogan. “We can finance [renewables] for up to 18 years. They’re designed to make renewable energy projects more competitive with other energy sources,” he said.
Among the more than 180 countries the Ex-Im Bank operates in, South Africa was chosen as one of nine that offer great potential for U.S. exports, according to the bank. It was chosen for the size of its economy, with an anticipated growth rate of 2.2 percent in 2012 and higher in 2013. And with $7.3 billion in U.S. exports going to South Africa annually, it’s also the U.S. largest trade and investment partner in sub-Saharan Africa, according to the bank.