1 July 2014

South Africa: AfDB Approves Loan for South African Solar Project

The African Development Bank has approved a US$142-million loan to help fund the construction of a $908-million, 100-megawatt (MW) concentrating solar power plant in the Northern Cape - the bank's first loan for a renewable energy project by an independent power producer in South Africa.

A consortium led by Spanish company Abengoa was chosen to build the plant during the second round of the South African government's renewable energy programme for independent power producers, which aims to add 17 800 MW from renewable sources to South Africa's energy mix by 2030.

Abengoa is currently building two other solar plants in the Northern Cape: a 50 MW solar tower plant near the town of Upington, and a 100 MW parabolic trough solar plant, dubbed KaXu Solar One, near the town of Pofadder.

The new parabolic trough solar plant, Xina Solar One, will be located alongside KaXu Solar One, and according to Abengoa the two 100 MW plants will "jointly shape the largest solar complex in Africa".

Abengoa said in a recent statement that Xina Solar One would produce sufficient clean energy to power approximately 90 000 households while reducing South Africa's carbon dioxide emissions by up to 315 000 tons annually.

"Additionally, the construction, operation and maintenance of the plant will stimulate regional socio-economic development by creating numerous direct and indirect jobs, as well as a supply chain that will foster economic growth in the country," the company said.

Parabolic trough technology employs parabolic-shaped mirrors that are set on a structure so they can track the movement of the sun and concentrate solar radiation onto a receiving tube. Inside the tube, a heat-absorbing fluid flows and reaches high temperatures. This fluid transfers the thermal energy to a heat exchanger, and then is used to heat water into steam, which ultimately drives a turbine to generate electricity.

Xina Solar one will incorporate a five-hour thermal energy storage system using a set of thermal storage tanks filled with molten salts. This will give the plant the ability to generate electricity after sunset or during cloudy periods, in addition to the ability to adapt energy production to the peaks of demand.

Abengoa CEO Manuel Sanchez Ortega said the project illustrated "the maturity of solar-thermal technology, which can be efficiently stored and used when it is needed".

Announcing its loan approval last month, the African Development Bank (AfDB) said it would "play an important role by providing much needed long-term finance, enforcing environmental and social standards and working to enhance the development impact of the Project".

Construction is due to start this year, with the full cost estimated at $908-million (about R9.5-billion), to be financed by the AfDB along with other development finance institutions and three of South Africa's commercial banks.

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