Abengoa has successfully completed debt raising for its Xina Solar One concentrated solar power project in South Africa.
Abengoa reported progress on the financial front for one of its three concentrated solar power (CSP) projects in South Africa last week. The company had commissioned South Africa’s first CSP project, KaXu Solar One, last month. Xina Solar One is being constructed adjacent to the KaXu Solar One project. Parabolic trough reflectors will be used in both the projects.
A large number of banks and financial institutions have pledged debt finance to the project: These include the African Development Bank, the International Finance Corporation, Industrial Development Corporation, and the Development Bank of Southern Africa; and local investment banks such as Absa member of Barclays, Nedbank, and Rand Merchant Bank, a division of FirstRand Bank Limited. Abengoa estimates a total investment of $880 million, 75% ($660 million) coming in the form of debt.
Xina Solar One will belong to a consortium, 40 % of which is controlled by Abengoa. Other members of the consortium are Industrial Development Corporation (IDC), Public Investment Corporation (PIC), and KaXu Community Trust.
Construction on the project is already underway and the project is expected to the commissioned by 2017. The project, like its neighbour KaXu Solar One, will use molten salts to remain operational during periods of low or no solar radiation. The project will have 100% storage capacity for up to 5 hours.
The projects were allotted to Abengoa, and its partners, during the auctions under South Africa’s Renewable Energy Independent Power Producers Programme (REIPPP). Developers have been allotted 7 CSP projects representing a total capacity of 550 MW. Abengoa secured 3 of those projects with cumulative capacity of 250 MW.
All the projects will sell power to Eskom, South Africa’s largest power utility, through long-term power purchase agreements.