Last week SolarReserve and its partners, the Kensani Group Intikon Energy closed on $564 million in financing to develop two 75 megawatt photovoltaic farms. SolarReserve is one of a few companies that pursuing both giant photovoltaic and concentrating solar power projects in the U.S. and abroad. The Letsatsi Project and the Lesedi Project will be in South Africa’s Free State and Northern Cape, respectively and are part of the country’s aggressive push to go renewable. Power from the projects is being sold to Eskom, the South African power utility.
With the financing closed, the group can look forward to starting construction on what will be among the largest solar projects in the country. "Financial close of these two South African projects marks a significant achievement for SolarReserve's international development and expansion. We have further advanced photovoltaic and solar thermal projects in development in the country under this progressive program initiated by the South African government, and look forward to continuing our work here," said SolarReserve CEO Kevin Smith in a release. While SolarReserve is building the biggest PV plants in South Africa, other companies are building larger CSP projects there, like BrightSource.
During construction the farms will create approximately 600 construction jobs and 100 permanent operational jobs, according to SolarReserve. the two projects will provide rural development programs and education enhancement, as well as skills and technology transfer. SolarReserve also anticipates that the projects will create 2,640 indirect and jobs throughout the supply chain 140 permanent indirect and induced jobs when the plants are operational.
The projects were selected by the South Africa Department of Energy (DOE) in the first round of bids under the South Africa Renewable Energy Independent Power Producer Procurement Program (REIPPPP). "The successful financial closure of the first round of REIPPPP projects is precedent setting on a global scale and has once again demonstrated the South African Government's commitment to the enhancement of national infrastructure," said Wandile Motlana, Chairperson of the Kensani Group.
The deal was arranged by Rand Merchant Bank (a division of FirstRand Bank Limited) and equity was raised from the IDEAS Managed Fund (managed by Old Mutual Investment Group South Africa), Kensani Capital Investments, GCL-Poly Energy Holdings, SolarReserve and Intikon, with Rand Merchant Bank providing preference share equity. Kensani Eaglestone Capital Advisory served as the financial advisor to the projects and Baker & McKenzie provided legal support.