SunEdison raise R1.8bn for Free State solar project

Globalised solar energy services and technology provider SunEdison has secured R1.8bn in foreign debt funding from the Overseas Private Investment Corporation (OPIC) to fund the Boshof Solar Park Project in the Free State province.

SunEdison, is acting through its South African affiliate in the R2.4bn Boshof Solar Park Project. The offshore raising of R1.8bn, 75% of project funding requirements, will be interpreted as an expression of confidence on the South African economy.

In an announcement released yesterday SunEdison described the Bishof project as the first in South Africa’s Renewable Energy Independent Power Producer Programme (REIPPP) to be supplied by a local South African majority-owned photovoltaic (PV) module manufacturer. SunEdison will maintain a 51% ownership stake in the project, with South African companies holding the remaining 49%.

The Government Employees Pension Fund’s (GEPF) amongst other local entities has a significant stake on the project. GEPF acting Principal Officer Joelene Moodley said “We are increasing our investment with SunEdison because we view the Boshof project as a secure investment for our members and pensioners. This is why we feel comfortable nearly doubling our investment in SunEdison’s South African projects by R312 million (US$30.8 million) for the Boshof Solar Park.  We believe this a safe place for us to invest and the project is aligned with GEPF’s mandate to back infrastructure projects that promote economic growth and job creation.”

The SunEdison statement said electricity generated by Boshof, with an installed capacity of 60MW AC, will feed into the South African grid, under the terms of a 20-year power purchase and implementation agreement signed with national power utility Eskom and the Department of Energy. The plant is scheduled to begin generating electricity in the fourth quarter of 2014.

“Access to a reliable source of energy is essential to addressing a wide range of development challenges from producing food to educating students and building modern infrastructure,” said OPIC President and CEO Elizabeth Littlefield. “OPIC is pleased to be supporting a project that will provide a clean and reliable source of electricity and help stimulate economic development.”

The Boshof project is expected to create approximately 280 jobs during its construction and operational phases, and through the use of local sub-contractors the project is expected to support over 1,000 jobs. Approximately 50% of the project’s total value will go to South African manufacturers supplying local components and South Africa service providers including the SunEdison AP90 Single Axis trackers that will be locally manufactured for the project.  Total procurement from black economic empowered (BEE) entities is estimated at R685 million (US$67.9 million).

“Helping improve developing economies by creating jobs is one of the many ways our company is transforming lives through innovation,” said Pashupathy Gopalan, SunEdison Vice President and Managing Director for South Asia and Sub-Saharan Africa.  “Boshof is a landmark project which will benefit the entire South African economy as it contributes to energy security and creates green jobs throughout the value chain.”

The statement added that over R200 million (US$19.7 million) is set aside for projects that will transform the community by improving access to education and healthcare, supporting enterprise development and other projects to improve the quality of life for residents throughout the Free State and Northern Cape.

SunEdison has two other projects in South Africa. The company said construction has begun on two other utility-scale projects developed by SunEdison in Limpopo province, Soutpan and Witkop, which together total 58MW contracted capacity.

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