100 MW Kathu solar project in the Northern Cape of South Africa starts construction

Construction has begun following the signing of a 20-year Power Purchase Agreement (PPA) between ENGIE and Eskom, South Africa’s state-owned power utility. The 100 MW Kathu Solar Park is expected to be operational in the second half of 2018.

Kathu Solar Park is a Concentrated Solar Power (CSP) project that is being built by Spanish engineering and construction companies ACCIONA and SENER. The plant uses parabolic trough technology specifically designed and patented by the global engineering and construction leader SENER, and is equipped with a molten salt storage system that allows 4.5 hours of thermal energy storage to extend the operational capacity of the plant after sunset. Kathu Solar Park will produce enough power to supply 150,000 homes.

Bruno Bensasson, CEO of the ENGIE Africa Business Unit, commented: “This is an important milestone for our first Concentrated Solar Power project in the ENGIE Group. The Kathu Solar Park project supports South Africa’s strategy of increasing the contribution of renewable power and also underlines our commitment to be a key partner in achieving sustainable energy generation in Africa.”

The joint venture between ACCIONA and SENER has been appointed by the ENGIE led consortium to provide engineering, procurement and construction services for the project. Construction started on site in May 2016 and is due for completion in the second half of 2018. Approximately 1,200 jobs, of which approximately 36% will be local, will be created during the construction phase. It is estimated that the Kathu Solar Park will save six million tonnes of CO2 over 20 years and will further promote local economic development through various projects such as a local community trust for the benefit of communities in the John Taolo Gaetsewe District Municipality situated in the Northern Cape and sourcing of other services from local entrepreneurs.

Ramón Jiménez, CEO of ACCIONA Industrial, highlighted the importance of this project for the sustainable development of the region: “We are committed to meeting all quality, environmental, health and safety standards for the project. Both the client and the local community demand high levels of social action, and thanks to our expertise we are confident we will achieve these objectives with excellence. ”

“SENER’s patented Concentrated Solar Power solution; SENERtrough2®, is a world leading cost efficient solar thermal power innovation.  All plants designed and built by SENER utilise a molten salt heat storage system that allows for continued power generation when the sun does not shine.  It is reliable, flexible and dispatchable with reduced carbon emissions, which is excellent for South Africa and sustainability into the future” said Siyabonga Mbanjwa, SENER Regional Managing Director in Southern Africa.

The consortium, which is led by ENGIE (48.5%), includes a group of South African investors comprising SIOC Community Development Trust, the Investec bank, Lereko Metier and the Public Investment Corporation.

The project is funded by a mix of debt and equity. The debt is funded from a club of South African banks, namely Rand Merchant Bank, Nedbank Capital, ABSA Capital, Investec and the Development Bank of South Africa.

Kathu Solar Park has been awarded preferred bidder in the third round of the Renewable Energy Independent Power Producer Procurement Program (REIPPPP) led by the South African Department of Energy (DOE).