The Lesedi Solar PV Project will play a part in helping South Africa meet its renewable energy targets, in addition to stimulating long-term economic development and creating new jobs. Once operational, SolarReserve’s Lesedi Project will produce 75 MW of energy for South African residents.
- Location: near Kimberly, South Africa
- Size: 75 MW-DC installed capacity
- Electricity Production: approximately 150,000 MW-hours annually
- Power Purchaser: 20-year government supported PPA with Eskom
- General Contractor: Consortium of ACS Cobra, Gransolar and Kensani
- Construction: Commenced January 2013
SolarReserve, as the U.S. developer of utility-scale solar energy projects, joined with the Kensani Group, an experienced empowered infrastructure player in the Southern African market, and Intikon Energy, a South African developer of renewable energy projects, to develop large-scale photovoltaic solar energy projects in South Africa. In December 2011, the South Africa Department of Energy (DOE) awarded the consortium with preferred bidder status for two 75 megawatt (MW-DC) projects, the Lesedi and Letsatsi Projects, in the first round of bidding under the South Africa Renewable Energy Independent Power Producer Procurement Program (REIPPPP).
Financing for both projects was complete in November of 2012, with Rand Merchant Bank (a division of FirstRand Bank Limited) acted as Mandated Lead Arranger and Bookrunner for the projects’ debt funding requirements. Equity for the projects was provided by 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 acted as financial advisor to the projects.
Jointly yielding approximately 600 construction jobs and 100 permanent operational jobs, the two projects will provide rural development programs and education enhancement, as well as skills and technology transfer. The two projects combined are expected to generate an additional 2,640 indirect and induced jobs across the supply chain during the construction phase and 140 new indirect and induced jobs during operations. The two projects will set aside a percentage of total project revenues for enterprise and socio-economic development, amounting to a total of approximately ZAR 510 million (USD 59 million) over the life of the projects, which will be invested for the benefit of the local communities surrounding the projects.
The Lesedi and Letsatsi projects have each executed 20-year power purchase agreements with Eskom, the South African power utility, which ranks as one of the top twenty utilities in the world by power generation. The projects will jointly cost approximately ZAR 5.15 billion or USD 586 million, making these two of the largest project finance transactions ever completed in South Africa and among the largest renewable energy projects in Africa.
Construction of the facility will be undertaken by a consortium led by one of the largest international contractors, ACS Cobra, along with Madrid-based Gransolar and South Africa’s Kensani Energy EPC. Upon completion, scheduled for mid 2014, the projects together will power more than 50,000 homes with clean, renewable energy from the sun. Construction at Lesedi commenced in January of 2013.