OPIC board approves $250 million for 60MW solar power project in South Africa

Tuesday, Sep 18, 2012

The Board of Directors of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, approved up to $250 million for the agency’s first solar power project in South Africa, a 60-megawatt plant that will help diversify the country’s electricity generation beyond its heavy coal concentration and in the process displace approximately 140,000 tons of greenhouse gas emissions in its first year alone.

“South Africa’s ambitious and impressive renewable energy program has established the country as a leader in the field”

The project came about in response to the new Renewable Energy Independent Power Producer Program (REIPP), a South African government initiative that aims to increase investment in renewable energy production, especially solar power, with a goal of having 3725MW online by 2016. By involving two local firms as co-sponsors along with its U.S. investors, the project will also help South Africa meet the Black Economic Empowerment (BEE) objectives of the program.

The OPIC financing will enable two U.S. companies, MEMC Electronic Materials and its subsidiary SunEdison, to construct and operate a solar photovoltaic plant in Boshoff in South Africa’s Free State province. All electricity generated by the plant will be sold to the national grid through a power-purchase agreement.

Coal-fired plants currently produce 84 percent of South Africa’s electrical generation capacity. SunEdison estimates that in the first year alone approximately 140,000 tons of greenhouse gas emissions will be displaced because of the project.

“South Africa’s ambitious and impressive renewable energy program has established the country as a leader in the field,” said OPIC President Elizabeth Littlefield. “We’re pleased to work with an experienced developer such SunEdison to deliver so many developmental benefits for South Africa, from the reduction of pollution and displacement of GHG emissions to the creation of local jobs and the realization of the country’s BEE program goals.”

Source: Business Wire