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07 July 2016

Kathu Solar Park reaches financial close, South Africa

The 100MW Kathu Solar Park project, located in the Northern Cape province of South Africa, has achieved financial close. Mott MacDonald is lenders’ technical advisor on the scheme, which achieved preferred bidder status in Round 3.5 of the Government of South Africa’s Renewable Energy Independent Power Producer Procurement (REIPPP) programme.

Kathu Solar Park is a concentrated solar power (CSP) project which will utilise parabolic trough technology with 4.5 hours of thermal energy storage. It has been developed by a consortium led by ENGIE and further sponsored by SIOC Community Development Trust, Investec bank, Lereko Metier, Public Investment Corporation and the Kathu Local Community Trust. Once complete, it will provide electricity to 80,000 homes across South Africa and will avoid the emission of 300,000 t CO2 per year.

As well as providing much needed power capacity to the grid system, the project will also open up new job opportunities for the local community. Over 1,200 jobs will be created at the peak of construction, while a further 70 permanent roles will be made available during the operational phase. Kathu Solar Park is due to be connected to the grid by the end of 2018. It will then supply clean and dispatchable electricity to Eskom, the South African power utility, under a 20-year power purchase agreement.

Mott MacDonald completed technical, environmental and contract due diligence during the project’s financing stage, which played a key role in the scheme attaining preferred bidder status and subsequently reaching financial close. The consultancy will now monitor construction and operations in an ongoing role.

Stavros Tassos, Mott MacDonald’s solar team leader, said: “Our role on this successful project provides further evidence of our world-class capability in the CSP sector. We have ongoing roles in all seven of the CSP projects that have been awarded under the REIPPP programme to date and we look forward to the continuing development of the sector in South Africa.”

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