World Bank loan for wind, solar projects

Nov. 3, 2011 - southafrica.info

South African state electricity company Eskom has been granted a US$250-million (about R1.9-billion) World Bank loan to help it implement two of the largest renewable energy projects ever attempted on the African continent.

The loan will help Eskom to build a 100 megawatt concentrating solar power plant in Upington in the Northern Cape, as well as a 100 megawatt wind power project in Sere, 300km north of Cape Town.

The loan is funded by the World Bank's Clean Technology Fund, which promotes scaled-up financing for demonstration, deployment and transfer of low-carbon technologies with significant potential for long-term greenhouse gas emissions savings.

"Africa is beginning to grow and the problem of energy insecurity is dampening that growth," World Bank vice-president for Africa Obiageli Ezekwesili said in a statement last week. "By investing in these cutting-edge, transformational solar and wind power projects, we are saying that Africa can lead the way in securing a clean energy future."

In September, Eskom secured a €100-million (R980.8-million) credit facility from French development finance group Agence Française de Développement (AFD) to finance the Sere Wind Project.

In June, it secured a US$365-million (about R2.46-billion) loan from the African Development Bank (AfDB) to finance both the Sere project and the Upington solar project.

According to the AfDB, about 90% of electrical energy produced in the country in 2010 was derived from fossil fuels, emitting approximately 224.7-million tons of carbon dioxide and making the South African economy one of the most carbon-intensive in the world.

Emission savings are estimated at about 5-million tons of CO2 equivalent – over a 20-year life span – for the Sere wind power project and 9-million tons for the Upington solar power plant.

Eskom CEO Brian Dames sayss the utility's first large-scale introduction of two renewable energy projects "demonstrates our commitment to reducing our carbon footprint and making the transition to a cleaner energy mix."

Energy from renewable sources will be expected to make up a substantial 42% of all new electricity generation in South Africa over the next 20 years, according to the country's Integrated Resource Plan 2010, which the Cabinet approved in March.