Published on April 6th, 2015 | by Mridul Chadha0
$170 Million Loan For Enel Green Power’s South Africa Wind Project
April 6th, 2015 by Mridul Chadha
Enel Green Power has set the ball rolling on one of the wind energy projects it secured in auctions under the South African Renewable Energy Independent Power Producer Procurement Programme.
Enel Green Power has secured a loan worth $170 million to set up a 111 MW onshore wind energy project at Gibson Bay, Eastern Cape Province, in South Africa. The loan has been provided by KfW IPEX Bank with Euler Hermes, the German export credit agency, providing partial credit insurance coverage. The credit line extended to Enel has been divided into two, with one maturing in 7 years and the other in 17 years.
The project was won by Enel during the third round of Renewable Energy Independent Power Producer Procurement Programme (REIPPP) auctions. The company secured rights to develop 2 wind energy projects, of total capacity 199 MW, and 4 solar power projects, of total capacity 314 MW. Enel started construction on 3 of the solar power projects early last month.
Each of these projects will supply electricity to Eskom, South Africa’s largest utility, under a 25-year power purchase agreement. Eskom has had some issues with providing grid connectivity to renewable energy projects. As a result, the fourth round of the REIPPP auctions has been delayed.
The REIPPPP had been relatively successful until the minor break due to grid connectivity issues. South Africa aims to auction 3,725 MW of renewable energy capacity over the next few years in an effort to significantly boost the share of renewable energy sources in the country’s electricity sector by 2030. This capacity expansion will be led mainly by wind and solar energy. A cumulative total of 1,850 MW of wind energy capacity, 1,450 MW of solar photovoltaic (PV) power capacity, and 200 MW concentrated solar power (CSP) capacity was slated to be auctioned.
But the response of project developers has been overwhelming. The popularity of the programme can be gauged from the fact that during the first 3 auctions 7 CSP projects of total capacity 600 MW have been auctioned.