Page 14 - AfrElec Week 33 2021

AfrElec
NEWS IN BRIEF
AfrElec
COAL
Eskom signs coal supply agreement with Arnot mine
Eskom said it had entered into an agreement with Arnot OpCo (Pty) Ltd for the supply of coal for the Arnot Power Station.
Arnot OpCo will supply the full coal requirement for the life of Arnot Power Station. The coal is of high quality, and if the need arises, it may be used at other stations. The contract has an exit clause after the sixth year that may allow both parties to cancel the contract.
The agreement serves to secure coal supply and to meet the burn requirements of the power station by conveyor belt, replacing the current supply by road from various sources on short- to medium-term contracts, some
of which were signed under emergency
and urgent procurement. This transaction paves way for Eskom to reduce the costs of operating the Arnot Power Station while securing high quality coal at affordable prices.
“While securing affordable coal supply
for the Arnot Power Station, this transaction will help create employment opportunities
for the retrenched Arnot Mine workers
and entrepreneurship opportunities for the Middleburg community,” said Sandile Siyaya, Eskom’s General Manager for Primary Energy.
“The transaction demonstrates that a mining asset curtailed by a major miner can be operated viably in the hands of a junior miner.”
Arnot OpCo is half-owned by 1038 former Exxaro Resources employees who were retrenched in 2015 from the Arnot Mine in
Middelburg, Mpumalanga. JSE-listed Wescoal Holdings owns the other 50% of Arnot OpCo.
In 2019, Eskom issued a request for proposals to the open market in order to secure coal supply to cover the remaining operating life for the Arnot power station. Arnot OpCo submitted a proposal with a view to reopen Arnot Colliery. The broad- based worker-led consortium effectively took over Arnot Colliery in February 2020 upon winning the Eskom tender to re-open and operate the mine.
ESKOM
BONDS
Fortress REIT launches
ZAR900mn sustainability-
linked bonds
Fortress REIT has launched a total of ZAR900mn sustainability-linked bonds aligned to its ongoing strategic ESG plan to scale up its renewable energy outputs and deliver more solar energy to the national grid.
The JSE has granted Fortress the listing of a 3-year sustainability-linked bond of ZAR495mn and a 5-year sustainability- linked note of ZAR405mn. Although the bonds do not have specific use-of-proceed requirements, the funds will assist Fortress with the continued installation and increase of solar energy in South Africa, across its retail and logistics portfolios. This will
allow Fortress’ real estate assets to meet its targets for solar energy, facilitate a reduction in reliance on utilities, reduce its carbon
footprint and contribute to mitigating climate change.
The key feature of this note is the linking of Fortress’ cost of funding to pre-agreed sustainability performance targets which will unlock a lower cost of funding, should all these targets be met.
Ian Vorster, CFO of Fortress REIT said, “The target measurement dates for the 5-year note are 30 June 2022 and 30 June 2024. Fortress has committed to increasing its renewable energy installations and megawatt outputs. The renewable energy target will
be achieved through an increase in solar energy installed measured in megawatt-peak (MWp) with respect to the South African portion of its portfolio. The target is for a 2.2MWp increase at the first target date in June 2022 and then a further 3.6MWp in June 2024 resulting in a cumulative 5.8MWp installation.”
This will be added to Fortress’s current solar energy programme which generates 4.735MWp from 10 installations, making its combined solar energy output of 10.7MWp by 2024 one of the largest from the local REIT sector.
FORTRESS REIT
NUCLEAR
South Africa’s Koeberg NPP to secure second life
Dallas-based professional services firm
chas been selected to carry out essential engineering modifications to give South Africa‘s sole nuclear power plant a second life.
That is part of a $1.2bn programme to extend the operating life of the Koeberg Nuclear Power Plant near Cape Town, which generates 5% of the country’s electricity.
The nuclear plant, operated by the public utility Eskom, will be modified to prepare
the installation of six new steam generators, replacing the current systems which have been in service since 1984.
The work is scheduled to start during a planned outage in January next year.
Jacobs Energy Security and Technology Senior Vice President Karen Wiemelt said: “This project is vital to maintain the pivotal role of nuclear power in South Africa’s energy mix.”
JACOBS
P14
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Week 33 19•August•2021