Solar Capital secures second contract with Department of Energy

Solar energy company Solar Capital signed its second independent power purchase agreement with the Department of Energy in May. The contract is for the supply and construction of a R2.5-billion solar energy project in De Aar, in the Northern Cape, to supply 75 MW of power. The project will employ more than 700 people during construction and 200 after completion.

The De Aar farm will have over one-million solar panels and will be one of the world’s largest solar farms, which will total four-million panels once complete. This 75 MW farm with its one-million solar panels will generate enough electricity to power about 14 000 South African homes every year.

Construction started last month and Solar Capital is partnering with Italy-based renewable-energy company Moncada Energy Group for the construction of the project.

Standard Bank and development financier the Industrial Development Corporation is funding the project, which has a 40% black economic- empowerment shareholding that includes a local community trust holding a 12.5% share.

Solar Capital is the only privately owned and locally managed solar renewable-energy company in South Africa to have bid successfully in rounds one and two of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) in South Africa.

The solar energy programme won the Green Infrastructure Project of the Year award at the sixth Global Infrastructure Leadership Forum, held in New York, in the US, earlier this year.

“This contract marks another milestone in our vision to be a world leader in the market of providing low-cost solar energy. Solar photovoltaic (PV) energy will continue to reduce in price over the coming decade and governments will find it cheaper than traditional fossil fuel and nuclear energy.

“Our PV panels are proven technology that convert sunlight into electricity without moving parts; they have no carbon emissions and are easy to install,” says Solar Capital founder and CEO Paschal Phelan.

The projects follow the first 18 solar PV projects, collectively representing 632 MW of capa- city, to reach financial close in November 2012 as part of the South Africa’s REIPPPP – in all, 28 renewables projects reached financial close last year, followed by a further 19 in May this year, which is the group the 75 MW De Aar project is part of.

The Department of Energy has released a request for proposals for the third bidding round. A bid-submission deadline of August 19 is being set for the third window, along with tightened local-content and economic-development requirements across all technologies.

The preferred bidders should be named on October 29, while the power purchase, connection, direct and implementation agreements should have been finalised on July 30, 2014.