Wind project reaches financial close on West Coast
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Wind project reaches financial close on West Coast

vestas_windmill_westCoast_saldanha_bayGlobal energy company GDF Suez has followed up its recent announcement that it will be proceeding with two open-cycle gas-turbines in South Africa with news that it, Investec and Kagiso Tiso Holdings have reached financial close for a €160-million (around R2.2-billion), 94 MW wind project, in the Western Cape.

The project in question is West Coast One, located 130 km north of Cape Town and which is expected to reach commercial operation in mid-2015.

GDF Suez holds a 43% equity interest in the project, Investec, 34.5%, and Kagiso Tiso Holdings, 20%, with the remaining 2.5% to be allocated to a community trust. In addition to investing equity in the project, Investec, jointly with Nedbank, have underwritten approximately R1.5-billion of debt required for the development of the wind farm.

GDF Suez chairperson and CEO Gérard Mestrallet says the project demonstrates the group’s growth ambitions in fast-growing markets, noting that it follows the start of construction of the 300 MW Tarfaya wind project in Morocco, which is owned in partnership with Nareva Holding.

Investec’s head of project and infrastructure finance Fazel Moosa adds that the bank has retained an equity position in a project that it originated as part of its global commitment to supporting renewable-energy initiatives.

“Given the unprecedented debt and equity financing requirements of the renewables programme, Investec will continue to utilise its capacity to provide debt and equity financing in support of this impressive governmental initiative,” Moosa adds.

The project was selected as a preferred project in May last year, following the second bidding round under the Department of Energy’s (DoE’s) Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

It was one of 19 projects, collectively representing 1 044 MW of capacity, that advanced to the point of signing 20-year power purchase agreements (PPAs) with Eskom in early May this year, bringing the number of active large-scale renewables projects in South Africa to 47, following the two bid windows.

In total, private wind, solar and mini-hydro developers are expected to invest about R75-billion over the next few years, raising South Africa’s installed renewables base to 2 460 MW.

In addition, the tender for the third REIPPPP bid window has been released, with potential developers having until August 19 to make submissions. The DoE has indicated that the preferred bidders will be named on October 29 and that PPAs and implementation agreements should be finalised on July 30, 2014.

South Africa initially intends procuring 3 625 MW of renewable energy through this process, which is likely to be extended into a rolling procurement strategy once that allocation has been fully absorbed.

The West Coast One facility will comprise 47 V90-2.0 MW turbines to be supplied by Vestas Wind Systems, raising the Danish group’s share in South Africa’s wind-energy deployment to 36%.

In addition, Vestas Southern Africa has been chosen as the engineering, procurement and construction contractor, as well as to provide operations and maintenance services at the facility.


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