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AfrElec NEWS IN BRIEF AfrElec

support 288MW in South

Africa

Four new renewable energy power plant
projects for South Africa have received
support totalling US $116m from the
Multilateral Investment Guarantee Agency
(MIGA), a subsidiary of the World Bank
Group which recently released the guarantees.
The future plants, with a combined installed
capacity of 288MW, will be constructed and
ZAR3bn a year over 10 years. During the first process in law that would allow Eskom to flout developed by the energy company BioTherm
two years of Tegeta delivering the coal, Eskom emissions rules. Energy, a subsidiary of Actis. Guarantees
paid for coal worth ZAR1.3bn but there distributed by MIGA for the renewable energy
were penalties that were levied by Eskom projects total US$46.9mn for the Aggeneys
on Tegeta for various failures, including for and Konkoonsies II photovoltaic power plants
failing to provide the specified and agreed coal COAL in the Northern Cape and US$68.9mn for the
specifications. That is how the claim ballooned two wind power plants of Golden Valley and
to ZAR5bn,” Eskom spokesperson Sikonathi SA coal exports set to fall Excelsior, planned in the Eastern and Western
Mantshantsha explained. Cape.
The committee said the over ZAR1bn South African coal exports were set to These guarantees from MIGA for the four
that was paid to Tegeta was being claimed by decline as the country didn’t have sufficient new renewable energy power plant projects
Eskom. infrastructure to exploit the Waterberg for South Africa cover the construction,
– a large, well-known coalfield, situated ownership and operation of the four projects.
in Limpopo province, which is mostly They permit BioTherm Energy, the holder of
undeveloped. these projects, to realise its investment while
ESKOM “The future of our coal in South Africa being protected against the risks of transfer,
is in the Lephalale-Waterberg basin,” said inconvertibility, expropriation, breach of
Eskom, World Bank meet July Ndlovu, Anglo American Coal CEO, contract, civil unrest and war, for a time
period of 15 years.
in an interview with FIN24 Speaks. The
as utility seeks to skip infrastructure required to export the coal was with experienced investors and promote
“We are pleased to continue to work
not in place, he said. “Given our competing
pollution gear economic needs as a country, it would take us investment across Africa despite the tense
sometime to invest in that infrastructure.”
global environment,” said Executive Vice
The management of Eskom. and the World The bulk of the country’s coal production President of Miga, Hiroshi Matano.
Bank met last week to discuss the status of is from Mpumalanga’s Witbank region, but Furthermore, he is hopeful that the support
a $3.75bn power plant loan after the utility resources are being depleted. By contrast, will “increase renewable energy capacity to
said it’s seeking to breach the loan terms some of the Waterberg region’s coal reserves meet demand, facilitate the diversification of
by skipping the installation of pollution are as high as 75bn tonnes, about 40% of all South Africa’s energy mix and help reduce
abatement equipment, Bloomberg reported. remaining reserves, said Fin24. greenhouse gas emissions.”
Eskom, which has ZA454bn ($27bn) Anglo American is expected to unveil ioTherm Energy is one of Africa’s leading
in debt, has said it is loath to spend the plans in the next two to three years to float independent power producers with nearly
ZAR42bn rand it says is needed to install off its coal resources, or sell them outright 400MW of wind and solar projects under
the flue-gas desulphurisation equipment via a trade sale. This is owing to shareholder construction in South Africa and Kenya.
required to reduce sulphur dioxide emissions pressure on the firm’s greenhouse gas Bought out 100% in August 2019 by the
at its Medupi power plant. The management emissions which it had promised to reduce. world’s leading emerging market investor
teams discussed “Eskom strategy to improve However, the coal business has recently Actis, BioTherm Energy, through its new
the company’s operational and financial diversified its sales base. “We took a decision renewable proposals, plans to make a
performance and the implementation status about a year or 18 months ago to diversify significant contribution to the implementation
of the our market, we started selling some our coal of the Independent Renewable Energy Supply
The management teams discussed to markets like Vietnam, South Korea and Programme for Power Producers in South
“Eskom strategy to improve the company’s Pakistan. As a consequence of that, we were Africa. The 288MW generated by these
operational and financial performance and able to significantly mitigate the demand projects will be sold for 20 years to Eskom,
the implementation status of the Eskom shortfall,” he said. the South African electricity distribution
Investment Support Project,” the World Bank company, under a power purchase agreement
said in a response to questions. “The bank is (PPA) that the two parties signed in 2018.
working with Eskom to ensure that the project
is successfully implemented.” RENEWABLES
While Eskom is yet to formally approach
South Africa’s environment ministry over World Bank’s MIGA to SOL AR
its plan, the government has said there is no

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