South African bank approves $375 million for 8 PV projects

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DBSA has allocated a total of $375 million for 421.4 MW worth of photovoltaic projects, which were announced under the first round of South Africa’s Renewable Energy Independent Power Producer Programme (REIPPP), last December.

Seven of the projects – De Aar Solar, Droogfontein, Hebert, Scatec, Greefspan, Letsasi and Khathu – will be located on the Northern Cape, while the final – Lesedi Power – will be built in the Free State. Overall, 18 preferred photovoltaic bidders were approved during the REIPPP’s first round, window one.

"These projects were subjected to the Bank’s environmental appraisal guidelines to ascertain their impact towards the environment. After a thorough environmental analysis conducted on these projects, we are confident that investment in the solar energy programme would have less adverse impact on climate change and the environment," said TP Nchocho, DBSA Group Executive for Investments.

DBSA’s $1 billion will also fund four CSP projects, one CPV project and one wind project on the Northern Cape and Eastern Cape.

Project delays

The loan will help to bridge the financing gap that has seen several renewable projects approved in the first round of REIPPP fall behind schedule. According to the South African Department of Energy (DOE), government paperwork has also delayed the timelines for projects under windows one and two.

"The approvals processes that Government had to undergo are taking longer than anticipated. However, the Department remains committed to close Window 1 projects despite the time delays," it said in a statement released last month.

Due to the delays, DOE has also been forced to push back the deadline for announcing the preferred bidders under round three. Originally, they were scheduled to be revealed on October 1, 2012, however have now been pushed back to May 7, 2013.

"The Department will use this opportunity to focus on financial closure for Windows 1 and 2, update the Request for Proposals (RFP), and finalise the new determination for additional MW," the statement said.

Edited by Becky Beetz.