Redstone Concentrated Solar Power Plant
The Redstone Concentrated Solar Power (CSP) plant is the largest renewable energy investment in South Africa to date and is on course to be completed in the fourth quarter of 2023.
The Redstone Concentrated Solar Power (CSP) plant is the largest renewable energy investment in South Africa to date and is on course to be completed in the fourth quarter of 2023. This project, which was awarded under Round 3.5 of the Renewable Energy Independent Power Producers Procurement (REIPPP) programme, consists of the construction and operation of a 100MW CSP tower generating facility using molten salt central receiver technology.
Located in the Northern Cape Province of South Africa, the Redstone plant will be equipped with a 12-hour thermal storage system that will deliver clean and reliable electricity to nearly 200 000 households during peak demand periods, even after sunset. The project is being developed by the lead shareholder – Acwa Power, an acknowledged Saudi Arabian developer, investor and operator of power generation and water desalination plants in 13 countries. Other shareholders in the project include the Central Energy Fund (CEF), Pele Green Energy and the local community.
Through the successful mobilisation of international project finance, Redstone CSP facilitated approximately R7 billion in foreign direct investment to fund and support the strategic energy transition goals of South Africa.
The project’s total cost equals R11.3 billion and it secured financing from several leading international and South African financial institutions, including the DBSA. The DBSA is contributing a combination of senior debt and equity financing for CEF’s participation in the project.
The project promotes economic development and growth through financing infrastructure development, job creation and leveraging the private sector to alleviate poverty and energy shortages. Further, the project is in line with the South African government’s policy of diversifying energy sources by increasing renewable energy production in the country through the REIPPP programme. By funding the project, DBSA is supporting an innovative, environmentally friendly energy generation initiative that supports the following strategic imperatives:
- Production of electricity for a country with a history of chronic electricity shortages;
- Production of energy that does not contribute to the release of greenhouse gases. When commissioned,
Redstone CSP will displace an estimated 440 metric tons of CO2 emissions per year while also providing value-adding ancillary services to Eskom – the first renewable energy project in the country to do so. The project is certified under the Climate Bonds Standard and Certification Scheme and aligned with the goals of the Paris Climate Agreement;
- Support for the local South African industry through the local content requirement of R3 billion. In addition to efficiently delivering clean energy to the national grid, the Redstone project will deliver tangible socioeconomic value by creating local job opportunities and utilising local supply chains. The project will reach close to 44% local content on procurement during the construction period, create more than 2 000 construction jobs at peak, with about 400 sourced from the local community, and create approximately 100 permanent jobs during the operating period;
- Enabling skills transfer in renewable energy, power generation, operation and maintenance of a renewable energy plant;
- Contributing to broad based wealth creation as the local community trust holds a 15% shareholding in the project company; and
- CEF’s investment in the Redstone project is in line with the public sector strategy of engaging in Private Sector Partnerships (PSP). DBSA’s funding to CEF not only supports this strategy but enables CEF to utilise similar project finance structures in potential future PSP models.
service for electricity customers through improved billing transparency and a greater awareness of consumption behaviour
the distribution network
administration costs for post-paid metering
for capital contributions to much needed investment in energy generation, transmission and distribution projects
134 jobs, with 67 contributing towards youth employment