Africa|Construction|Design|Energy|Engineering|Financial|Hogan Lovells|Power|PROJECT|Projects|Renewable Energy|Renewable-Energy|Services|Solar|Operations
Africa|Construction|Design|Energy|Engineering|Financial|Hogan Lovells|Power|PROJECT|Projects|Renewable Energy|Renewable-Energy|Services|Solar|Operations

SOLA, African Rainbow Energy reach financial close on two 100 MW solar projects

A photo of SOLA's Aries project

SOLA has a number of solar projects, including the 10 MW Aries project in the Northern Cape

12th September 2022

By: Tasneem Bulbulia

Senior Contributing Editor Online


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Following the regulatory change in August 2021 to raise the licensing limit for distributed generation projects from 1 MW to 100 MW, the first two registered 100 MW energy projects have reached financial close.

The financial close of the projects happened less than six months after the power purchase agreements were signed in mid-March. Construction of the projects will now begin.

The projects’ purpose is to fulfil the obligations of a bilateral electricity sales agreement between vertically integrated independent power producer SOLA Group and Tronox Mineral Sands.

These renewable energy facilities will supply electricity, through wheeling arrangements with State-owned utility Eskom, to five Tronox facilities in the Western Cape and KwaZulu-Natal for their own use. 

Tronox’s operations are highly energy intensive and this is expected to ensure Tronox’s economic viability and long-term electricity supply affordability.

Tronox's renewable energy project with SOLA is expected to reduce its global carbon emissions by about 13% compared with its 2019 baseline.

SOLA’s in-house engineering, finance and project development capabilities are posited to have helped to accelerate the conclusion of the deal.  

The projects needed to raise R4-billion of funding for construction and development. SOLA reached agreement with funding partner and shareholder African Rainbow Energy.

“African Rainbow Energy is a leading renewable energy platform, the largest shareholder in the SOLA Group and the funder of the two projects.

“This is a clear demonstration of African Rainbow Energy’s and partners, Absa, DBSA, Nedbank and Standard Bank’s commitment to our country, the economy, and our customers. This investment brings hope,” says African Rainbow Energy CEO Brian Dames.

The debt arrangement was led by PepperTree Capital and senior lenders included three of the big banks in South Africa and the Development Bank of Southern Africa, which provided R3.1-billion of debt into the project.

The legal advisers for the transaction were Pinsent Masons, Hogan Lovells, Faskens, Allen & Overy and ENS.

SOLA also entered into a joint venture agreement with Wilson Bayley Holmes-Ovcon (WBHO) for the design and construction of the project. SOLA will provide the engineering services and WBHO will perform the construction.

The project comprises 387 000 solar panels mounted on single-axis trackers that track the sun’s position as it moves across the sky. The project will also be one of the first projects to directly feed into Eskom’s high-voltage transmission network.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online



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