Google invests in South African solar energy plant

The development consortium consisting of SolarReserve, a US developer of utility-scale solar power projects; the Kensani Group, an investment player in South Africa; and Intikon Energy, a South African developer of renewable energy projects, has successfully closed project financing for the Jasper Solar Energy Project – a 96 megawatt (MW DC) solar photovoltaic (PV) project.

The Jasper Project is located in the Northern Cape of South Africa near Kimberly, and was selected by the South Africa Department of Energy (DOE) in May of 2012 in the second round of bids under the South Africa Renewable Energy Independent Power Producer Procurement Program (REIPPPP).

The project also marks Google‘s first renewable energy investment in Africa – the Internet search giant has invested US$12 million (122 million Rand*) investment.

Upon completion, the Jasper Project will be one of the largest solar installations on the continent and will help South Africa meet its renewable energy targets, and power more than 30,000 South African homes.

Rand Merchant Bank (a division of FirstRand Bank Limited) acted as Mandated Lead Arranger and Bookrunner for the Jasper Project’s debt funding requirements. Equity investment for the project was provided by Google, the Public Investment Corporation (PIC), Kensani Capital Investments, SolarReserve, Intikon, Development Bank of South Africa and the P.E.A.C.E. Humansrus Fund, with Rand Merchant Bank providing preference share equity. International law firm Baker & McKenzie supported the project activities through its offices in Johannesburg and the United States, with Kensani Eaglestone Capital Advisory acting as financial adviser.

The Jasper project has executed a 20-year power purchase agreement with Eskom, the South African power utility. The project cost of approximately ZAR2.3 billion ($260 million) will make this one of the single largest PV projects in Africa. The Jasper project is located adjacent to the 75 MW Lesedi Solar Energy Project, which broke ground in February 2013. The Jasper and Lesedi Projects, along with the Letsatsi Project located near Bloemfontein, put the consortium’s total portfolio of successful solar projects at 244 MW, accounting for a 20 percent share of South Africa’s solar energy market.

The project has an annual operations and maintenance budget of ZAR 36.5 million ($4 million) for staff, services and spare parts. The project will also set aside a percentage of total project revenues for enterprise and socio-economic development, amounting to a total of approximately ZAR 230 million ($26 million) over the life of the project, which will be invested for the benefit of the local communities surrounding the project.

1 USD = 10.1873 ZAR Mid-market rates: 2013-05-31 07:52 UTC

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