Enel Green Power RSA has signed project financing agreements of up to €950 million ($1 billion), with senior lenders Nedbank and Absa for the development of wind projects in South Africa.
The facility is inclusive of up to 80% of the overall investment of around €1.2 billion ($1.3 billion) on a portfolio of five new wind projects, totalling roughly 700MW of capacity.
Global law firm Norton Rose Fulbright advised Enel Green Power RSA Proprietary Limited (EGP RSA), as sponsor, and Enel Green Power RSA 2 (RF) Proprietary Limited (EGP RSA 2), as borrower.
The portfolio consists of 5 projects: with three wind farms located in the Northern Cape Region: Garob (138MW), Karusa (142MW) and Soetwater (142MW); and two wind farms located in the Eastern Cape Region; Oyster Bay (142MW) and Nxuba (142MW).
Jackie Midlane, Head of Banking and Finance, Norton Rose Fulbright, who led on the transaction commented: “Following our work for Enel Green Power in relation to Round 3 of South Africa’s Renewable Energy IPP Procurement Programme (REIPPPP), we are delighted to have assisted Enel Green Power on the successful completion of this innovative and complex transaction.
"Working across several jurisdictions and under a very tight timeframe, we helped Enel Green Power implement a first-of-its-kind financing structure, which will support the growth of our client’s business and investments in Africa.”
Following the signing of the agreements, construction of the first project, Nxuba, is expected to start by the end of 2018. Read more: Enel funnels wind energy to Facebook and Adobe in the US
Antonio Cammisecra, head of Enel’s Global Renewable Energies Division Enel Green Power, commented: “We have reached an important milestone in South Africa by achieving financial close on five major wind projects, which confirm our continuing commitment to the country’s renewables sector, within a context of sustainable development.
“Enel Green Power will be supporting these processes by generating its emission-free energy in partnership with local shareholders and in cooperation with the local communities, according to our long-term vision of shared value creation.”
The company is contributing around €230 million ($267 million) in equity in the construction of the five wind farms.
Development of wind projects
The Garob, Karusa and Soetwater projects will be constructed in the Northern Cape province, while the Oyster Bay and the Nxuba wind farms will be built in the Eastern Cape province.
The five wind farms were all awarded in round 4 of the South African government’s Renewable Energy Independent Power Producer Procurement Programme. Each project is minority-owned by a local partner.
Following the start of construction of Nxuba, construction of Oyster Bay and Garob is expected to start by the first half of 2019 and construction of Soetwater as well as Karusa is expected to start in the second half of the same year.
Nxuba is expected to be operational in the second half of 2020, Oyster Bay in the first half of 2021, while Garob, Soetwater and Karusa in the second half of 2021.
By 2021, all five new wind farms are due to be up-and-running, bringing Enel Green Power’s total installed capacity in the country to more than 1.2GW.
Once operational, the five projects are expected to produce around 2.6TWh each year, saving the annual emission of roughly 2.7 million tonnes of CO2 into the atmosphere.