France’s Total SA will dig further into South Africa with the awarding of a $200 million solar power plant project to SunPower, in which the French oil giant owns a 65% stake.
The deal is expected to close mid-next year, with California-based photovoltaic manufacturer SunPower eyeing the start of construction for the South African plant during the second half of 2014, with completion slated for mid-2015.
The project is part of the South African government’s Independent Power Producers Procurement Program, and Prieska, in the Northern Cape province, will be the host of the massive solar farm.
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The solar power plant is expected to generate around 210 gigawatt-hours (GWh) of power annually—or enough electricity to meet the demand of around 45,000 residents.
"…The South African project again illustrates the beneficial effect of Total’s leverage on the international development of SunPower," Tom Werner, Chief Executive General SunPower, said in a statement. “SunPower's experience in the construction of solar power plants around the world, combined with the historical presence of Total South Africa will have a positive impact on the region, in particular for local employment."
Eskom Holdings SOC Ltd., which currently supplies 95% of South Africa’s power, has agreed to buy the electricity generated by the project.
The state electric company uses coal to generate 85% of its power.
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The project is secured under a co-development agreement with South African Mulilo Renewable Energy. Total will own 27% of the project, along with five partners: Calulo Renewable Energy with 25%, Mulilo Renewable Energy with 18%, the Industrial Development Corporation (IDC) with 15%, Futuregrowth Asset Management (Pty) Ltd with 10%, and a Local Community Trust with 5%.
The project will be financed 80% through non-recourse project debt from South African banks. The remaining 20% will be provided by Total Calulo Renewable Energy, Mulilo Renewable Energy, IDC, Futuregrowth Asset Management (Pty) Ltd and the local community based on their level of participation.
By. Charles Kennedy of Oilprice.com