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Tuesday, April 16, 2024

Anglo-American announces financing for wind and solar projects

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Anglo-American has announced that its jointly owned renewable energy venture with EDF Renewables, Envusa Energy, has completed the project financing for its first three wind and solar projects in South Africa.

The terms and structure of the non-recourse project financing were typical of high-quality renewable energy infrastructure assets.

The three renewable energy projects, known as the Koruson 2 cluster of projects and located on the border of the Northern Cape and Eastern Cape, will have a capacity of 520MW of wind and solar electricity generation.

Themba Mkhwanazi, Anglo American’s regional director for Africa and Australia said the successful project financing of the initial projects marked their first major step towards addressing Anglo American’s largest remaining source of Scope 2 emissions-the electricity supply in southern Africa.

“As we make progress towards our 2040 carbon neutral operations commitment, we also see the opportunity to enhance energy reliability and grid resilience in South Africa. We expect that energy availability to help catalyse extensive socio-economic activity, playing a critical role in unlocking South Africa’s economic development and growth prospects,” Mkhwanazi said.

The projects – Umsobomvu Wind project (140MW), the Hartebeesthoek Wind project (140MW) and the Mooi Plaats Solar project (240MW) – formed part of Envusa Energy’s mature pipeline of wind and solar projects in South Africa. The renewable energy ecosystem that Envusa Energy planned to develop was expected to supply a mix of renewable energy, generated on Anglo American’s sites in the southern African region, and from other sites from which renewable energy would be transmitted via the national grid.

The Koruson 2 wind and solar projects benefit from outstanding yield resources, coupled with a robust Eskom grid connection. The configuration promised considerable electricity cost savings compared to existing tariffs.

Anglo American’s three businesses in South Africa (Anglo American Platinum, Kumba Iron Ore and De Beers), have committed to 20-year off-take agreements with Envusa Energy. The agreements will see Anglo American Platinum receiving 461MW of supply, Kolomela mine 11MW and Venetia mine 48MW. All projects were to reach commercial operation during 2026. The inaugural phase of the contracts was expected to abate about 2.2 million tonnes per year of carbon dioxide.

Nolitha Fakude, the chair of Anglo American’s Management Board in South Africa and chair of Envusa Energy, said they were delighted with the progress they were making in setting up Envusa Energy for long-term success as a major renewables powerhouse in South Africa.

“Achieving financial closure for these three high-quality renewable energy projects marks a crucial milestone in support of Anglo American’s global decarbonisation journey and bolsters South Africa’s pursuit of a resilient and clean energy future,” Fakude said.

“We believe that the energy transition offers a unique opportunity to generate substantial new economic opportunities as part of South Africa’s journey towards an inclusive, sustainable and low-carbon economy.”

Tristan de Drouas, the CEO at EDF Renewables in South Africa, said that collaborating with Anglo American to apply its extensive global expertise in renewable energy infrastructure development, design and delivery, had been rewarding.

“With Envusa Energy being developed as a jointly owned venture with Anglo American, we have solidified our long-term commitment to South Africa’s transition to clean energy,” De Drouas said.

“The financial close of this initial cluster of projects is the first step towards Envusa Energy’s ambition to roll out 3 to 5GW of wind, solar and storage projects by 2030.

“These collective initiatives align seamlessly with EDF Group’s CAP 2030 strategy. This strategy is ambitiously focused on doubling our net renewable installed energy capacity globally (including hydropower) from 28 GW in 2015 to 60 GW by 2030.”

In line with both companies’ commitment to supporting a just energy transition, Envusa Energy was exploring a range of BEE and community partnership models that would enable businesses and host communities to share in the benefits created by the development of the renewable energy ecosystem, along its value chain.

The first of the empowerment initiatives included the incorporation of a 20% equity investment by Pele Green Energy (Pty) Ltd (an established South African independent power producer) into each of the three project companies delivering the development of the Koruson 2 assets, alongside the establishment of a community trust to manage the financial interests of communities in the Koruson 2 assets.

Envusa Energy was also implementing the incorporation of a BEE partner at the business level to further demonstrate its commitment to supporting BEE.

The development of the renewable energy ecosystem presented an opportunity to help build a more collaborative and inclusive economy that placed people and the principle of shared prosperity at the heart of development.


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