OPIC funds 100 MW CSP plant in South Africa, grid improvements in Pakistan

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As part of a $1 billion initiative to support private sector-led development projects in Africa and Asia, the U.S. government’s Overseas Private Investment Corporation (OPIC) has approved up to $400 million in financing for a 100 MW concentrating solar power (CSP) plant in South Africa.

Projects approved for financing include large-scale renewable power generation, increased lending to underserved populations to spur economic growth and partnerships to modernize and construct stabilizing energy infrastructure in fast-emerging economies that currently lack reliable electricity, the agency said.

OPIC’s financing will support the South African solar energy project by providing an investment guarantee to California-based SolarReserve and Saudi Arabia’s ACWA Power, which are partnering on the construction and operation of the Redstone CSP plant in the Northern Cape province. SolarReserve’s development of the project also helps fulfil the South African government’s renewable energy goals.

OPIC is playing a key role in the White House’s $7 billion Power Africa initiative, which aims to address critical power access needs across sub-Saharan Africa. The initiative is focusing on the expansion of the continent’s power generation capacity and specifically targeting small-scale renewable energy investments.

OPIC also provided $250 million in to Standard Bank of South Africa, which it will use to finance power generation and infrastructure projects in OPIC-eligible countries in Sub-Saharan Africa. The demand for electricity across Africa was critical, the agency stressed.

In Pakistan, Karachi-based electric company K-Electric (KE) will use a $250 million OPIC investment guaranty to undertake a comprehensive and transformative power grid upgrade program in the country’s largest and most populous city. Electricity outages and shortfalls are a constraint to economic growth and stability in Pakistan and KE’s grid improvement project will significantly improve reliability and efficiency of the power network in its licensed area, which extends to other parts of Sindh as well as Baluchistan provinces in addition to Karachi, OPIC said. The agency’s support in conjunction with a direct loan from Citibank to K-Electric’s project will support new transmission capacity, loss-reduction measures and an innovative smart grid initiative to more accurately distribute and utilize existing power.

OPIC President and CEO Elizabeth Littlefield said the projects approved by OPIC were “significant in both vision and volume,” adding,“[T]he new clean power generation led by SolarReserve as well as sweeping efficiency modernizations from K-Electric exemplify the exciting realities of energy production and delivery in the 21st century. These projects show the transformative impact that the U.S. private sector can have in the developing world, and we look forward to their successes in supporting clean power and inclusive growth in Asia and Africa.”