Financial services provider Absa acted as joint mandated lead arranger and lender for South Africa’s first utility-scale renewable energy captive power project, which will be built in the North West at an estimated cost of about R4.1-billion.
The project – comprising of two projects of 100 MW each – is being developed by SOLA Group of South Africa and will supply power to Tronox Holdings’ South African operations, Tronox SA, under a long-term power purchase agreement.
The project will assist Tronox to reduce its reliance on fossil fuel power and is in line with its strategy to reduce carbon emissions. The project is expected to reduce Tronox’s global carbon emissions by about 13%.
“Absa is proud to be associated with this project, where financing is in line with the bank’s own sustainable finance goals which include assisting clients on their journeys to transition from fossil fuels to renewable energy sources, thereby significantly reducing greenhouse gas emissions,” says Absa Resource & Project Finance principal Shaun Moodley.
Tronox SA is one of the largest heavy mineral sands producers in South Africa and operates in KwaZulu-Natal and the Western Cape. It mines sand deposits and processes the heavy mineral sands-bearing concentrates at its mineral separation facilities. Its products include titanium slag, a feedstock in the manufacturing of titanium dioxide pigment mainly used in the paint and plastic industries and zircon, which is mainly used in the ceramics industry.
The project will supply electricity, through wheeling arrangements with Eskom, to five of Tronox SA’s facilities in the Western Cape and KwaZulu-Natal. Tronox SA’s operations are energy intensive and, based on a competitive energy tariff secured through the structure, will contribute to significant savings in Tronox’ energy costs.
The transaction adds to Absa’s growing renewable energy portfolio, now measuring over 3.1 GW, including Absa’s participation in Eskom’s renewable energy programme.