South African Redstone concentrated solar power (CSP) project has achieved its first debt drawdown on the largest renewable energy investment in South Africa
The African Development Bank (AfDB) acted as the Mandated Lead Arranger (MLA) and coordinating bank for approximately US$763mn total investment, with a commitment of approximately US$151mn to the transaction. The project has also secured financing from leading international and South African financial institutions including ABSA Bank, CDC Group, Development Bank of Southern Africa (DBSA), Deutsche Investitions-und Entwicklungsgesellschaft (DEG), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) Investec Bank, Nedbank Limited, Sanlam Limited, and the Industrial Development Corporation of South Africa.
Redstone is led by ACWA Power, a leading Saudi developer, investor and operator of power generation, water desalination and hydrogen plants in 12 countries, which is also the lead shareholder in Redstone with co-shareholders including the Central Energy Fund, Pele Green Energy and the local community.
The Redstone project will be equipped with a 12-hour thermal storage system that will deliver clean and reliable electricity to nearly 200,000 households round the clock in the Northern Cape Province of South Africa. The construction for the project is well underway and a tower foundation for the project has been completed with the commencement of operations scheduled for Q4 2023. Redstone has facilitated approximately ZAR 7 billion in foreign direct investment to fund and support the strategic energy transition goals of the country.
AfDB’s vice-president in charge of power, energy, climate change and green growth Dr. Kevin Kariuki said, “Redstone will play an important role in South Africa’s decarbonization efforts. We are therefore pleased to have played such a prominent role in the project’s structuring and financing. Furthermore, the Bank looks forward to playing an even bigger part in supporting South Africa’s just energy transition by harnessing the abundant renewable sources of energy through innovative partnerships with the private sector.”
Redstone CSP will offset an estimated 440 metric tons of CO2 emissions per year while also providing value-adding ancillary services to Eskom, and it is the first renewable energy project to offer ancillary services in the country.
