With just two weeks to go until the United Nations holds its Framework Convention on Climate Change in Durban, the Government of South Africa and the World Bank have signed a $250 million loan agreement that will launch the development of two of the largest clean energy projects ever attempted on the African continent – a concentrating solar power facility and a wind power installation.
The 200 megawatt (MW) capacity of the two power plants could generate enough electricity to power 200,000 homes; and each project is projected to reduce South Africa’s carbon emissions by 5 metric tons a year.
South Africa’s Minister of Finance Pravin Gordhan and Minister of Public Enterprises Malusi Gigaba were on hand to sign the agreement on November 14; as were Brian Dames, CEO of Eskom Holdings SOC Limited, the government-owned utility; and the World Bank’s Country Director for South Africa Ruth Kagia,.
The “soft loan”– financing with a below-market-rate of interest – has a 40-year term, a 10-year grace period, and a 0.25 percent annual service charge on disbursed amounts. The loan was approved by the World Bank on October 27 of this year; and comes from its Clean Technology Fund, which promotes scaled-up financing for demonstration, deployment, and transfer of low-carbon technologies with significant potential for long-term greenhouse gas emissions savings.
Established in 1944 and based in Washington, D.C., the World Bank comprises 187 member countries.
The Climate Investment Funds are a pair of funds – the Clean Technology Fund (CTF) and the Strategic Climate Fund (SCF) – that help developing countries pilot low-emissions and climate-resilient development. With CIF support, 45 developing countries are piloting transformations in clean technology, sustainable management of forests, increased energy access through renewable energy, and climate-resilient development. The CIF are channeled through the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and World Bank Group.
The new financing complements the US$260 million provided to Eskom to implement the Upington and Sere renewable energy projects included in the $3.75 billion Eskom Investment Support Project approved in April 2010.
“Across Africa, governments, the private sector and civil society are looking for large-scale, technically viable, transformative renewable energy projects,” said Jamal Saghir, World Bank Director for Sustainable Development for the Africa Region. “With the signing of these agreements, South Africa is uniquely positioned to jumpstart low-emission, climate-resilient development for the benefit of all.”
The regional utility – Johannesburg, South Africa-based Eskom – generates approximately 95 percent of the electricity used in South Africa and approximately 45 percent of the power used in Africa. It is one of the top 20 utilities in the world by generation capacity.
The two renewable energy projects that will be deployed and managed Eskom will comprise:
A 100 megawatt (MW), utility-scale, concentrating solar power plant to be located in Upington, Northern Cape Province. The Upington Concentrating Solar Power Plant is envisioned as a tower and mirror design configured to operate as a base-load unit (which provides the amount of power required to meet minimum demands) or mid-merit unit (which can come on-line quickly in response to increases in the demand for power). Using molten salt as a thermal circulating fluid and storage medium would enable the plant to achieve a 60 percent to 65 percent annual load factor.
Phase 1 of the project will involve a technology assessment study. The aim of the study will be to assess the possibility of other plant configurations, based on recent technological improvements and the site data (Upington solar and wind data, water, etc). The study, which will be used to finalize the performance specifications of the plants, will be conducted by an independent consultant.
A 100 MW wind power project to be located in Sere, 300 kilometers (about 185 miles) north of Cape Town. The Western Cape Province Wind Energy Facility could potentially accommodate up to 200 MW of wind capacity, however Phase I of this wind site – the Sere Wind Power Project – will be a 100 MW wind farm comprising 40 to 50, 2.0 MW to 2.5 MW (Class 2A) wind turbines. The project is fully scoped and specified. The site has a “moderate” wind resource; based on measurements completed to date at the site, which is about 40 km (25 miles) from the existing 132- kilovolt (kV) sub-transmission line.
Eskom CEO Brian Dames said the wind farm would be completed by 2013 and the solar farm a year later in 2014
In related news, from November 28 through December 9, 2011, South Africa will assume Presidency of the next Convention of Parties (CoP-17) meeting of the U.N. Framework Convention on Climate Change in Durban. South Africa has made bold commitments to broadening its energy mix, and the Durban meetings will offer an opportunity to discuss greater scale-up and scale-out of renewable energy technologies throughout Africa. In addition, sustainable energy access will be a major issue for discussion, as only 31 percent of Africa’s population has access to electricity.
“Africa is beginning to grow and the problem of energy insecurity is dampening that growth,” said Obiageli K. Ezekwesili, World Bank Vice President for the Africa Region. “By investing in these cutting-edge, transformational solar and wind power projects, we are saying that Africa can lead the way in securing a clean energy future.”
Cheryl Kaften is an accomplished communicator who has written for consumer and corporate audiences. She has worked extensively for MasterCard (News - Alert) Worldwide, Philip Morris USA (Altria), and KPMG, and has consulted for Estee Lauder and the Philadelphia Inquirer Newspapers. To read more of her articles, please visit her columnist page.Edited by
Jennifer Russell
