The Multilateral Investment Guarantee Agency (MIGA) has issued $98.6 million in guarantees to Atlantica for the ownership and operation of the 100MW KaXu Solar One solar power plant in South Africa.
The Agency is providing protection from Breach of Contract, future returns and investments into the project.
The plant has been operating since 2015.
“This project is part of a broader effort to diversify South Africa’s energy mix and help transition the country to a low-carbon economy,” said Keiko Honda, MIGA’s EVP and CEO.
Honda noted that the project also aims to provide reliable power among lower-income communities while supporting local employment.
Power generated by the plant can be stored and discharged at any time, keeping the plant running during times of reduced sunshine, and allowing it to extend power production for up to three hours after sunset at full capacity.
This unique ability allows KaXu to meet grid dispatch requirements and supply baseload power during peak demand, something that not all solar plants can do.
South Africa is among the top ten coal producers, and as of May last year, power generation capacity was dominated by coal-fired generation, which accounted for approximately 76% of total installed capacity.
The energy sector will need a complete transformation of its future energy mix and replacement of ageing coal-fired power plants with cleaner energy production technology.
The REIPPP targets the installation of approximately 19GW of renewable energy by 2030.