The National Empowerment Fund (NEF) and the Industrial Development Corporation (IDC) have joined hands to pump up a R150m heat and power cogeneration project in Newcastle, KwaZulu Natal.
A statement released by the NEF yesterday said the development finance institution (DFI) has invested R48 million into the construction of the heat and power plant, commissioned for Karbochem’s synthetic rubber plant in Newcastle. The NEF said the balance of the funding will come from the IDC.
The funding has been granted to project promoters, Distributed Energy Generation and Steam Team and Pantheon Resources, who jointly have secured the contract to provide steam and power to Karbochem’s co-generation project.
The NEF characterized the funding as part of capital investment required to build the renewable energy plant and create much needed local jobs in the former coal mining town. It will be distributed in ordinary equity (R12 million) and shareholder loan (R36 million), which includes warehousing 40 percent of the shareholding for Broad-Based Black Economic Empowerment investors.
Karbochem needs the energy to operate and process its synthetic rubber plant. The co-located combined heat and power plant employs Atmospheric Fluidised Bed Combustion boilers and a back pressure turbine that will generate 60 tph steam and 6 MW of power.
“We are excited to be deploying our Strategic Projects funding as part of our mandate to invest in early stage projects, getting involved in the feasibility, scoping and financing of the project,” said Hlengiwe Makhathini, Corporate Finance Executive at the NEF.
“This ensures that from the onset we are able to safeguard the attainment of the BB-BEE objectives, insist on the creation of jobs, as well as the transfer and development of skills. In this project specifically we forecast the creation of more than 170 direct jobs during the plant construction phase and nearly 50 permanent jobs once it’s been completed.”
She added that the NEF was encouraged by this investment given the possibility to deploy pioneering, world-class technology and advance the renewable energy agenda. Its other significant benefits include positive environmental management because of low carbon emissions and spin-off corporate social investment initiatives to benefit the local communities.
Similar projects have been implemented in countries including India and Kenya.
DEG/ Steam Team/ Pantheon Resources Spokesperson Charles Liebenberg said “We are very grateful for the funding support we’ve received from both the NEF and the IDC, and our focus is now on ensuring the successful construction of the plant and the realisation of the project’s goals which include the creation of new jobs.”