SUNEDISON SECURES FUNDING FOR BOSHOFF SOLAR PROJECT

SunEdison has secured 1.8 billion rand in foreign debt to fund the 60 megawatt Boshoff solar park project.

“The South African government has a renewable energy IPP programme where they’re attracting renewable developers from all over the world to come in and set up solar power plants, as well as other renewable power plants,” Pashupathy Gopalan, SunEdison’s vice president and managing director of South Asia and sub-Saharan Africa , told CNBC Africa on Wednesday.

The project is also expected to and feed electricity into South Africa’s national power utility Eskom. The power utility will buy electricity that the project produces in a 20-year power purchase agreement. SunEdison provides solar energy services and also provides solar-generated energy to commercial, government, and utility customers.

“In the first round of bidding that happened in 2011 and 2012, the pricing for solar electricity for the industry was about 2.50 rand per kilowatt hour. In the second round, where this project is, most projects have been generally in the range of 1.6 rand and 1.7 rand,” Gopalan explained. “The most recent third round, which was announced earlier this week, is sub one rand per kilowatt hour. This gives you the potential for solar, which is quite amazing because now the subsidies have to be a lot less, and the solar can become very competitive.” SunEdison will also maintain a 51 per cent ownership stake in the Boshoff project, and South African companies will hold a 49 per cent stake.

Eighty seven per cent of the 2.4 billion rand for the project is foreign direct investment, and SunEdison will invest 51 per cent. The US government will also invest through the Organisation of the Petroleum Exporting Countries. “The beauty is that solar access is a very good natural hedge against future energy rises. It also gives energy security for the country, the jobs it will create as well as the socio-economic development in the region where you set up the plant,” said Gopalan. “We’re very happy that we have sizeable and very renowned local South Africans investors as well in the project.”