AIIM investment, Renewable Energy Investments South Africa, reaches major milestone with commercial operation of solar PV facility

05 Jan 2015

Renewable Energy Investments South Africa (RF) Pty Ltd (REISA) commenced commercial operation of the Kathu Solar PV facility – one of the largest photovoltaic projects in South Africa – on 11 November 2014. The project is expected to deliver 179GWh of clean energy into the grid annually, equivalent to the electricity requirements of 68,000 low income households in South Africa.

After reaching Financial Close in November 2012, the project has since achieved all scheduled milestones in terms of the Power Purchase Agreement (PPA). Construction of the facility was completed by the joint-venture WBHO-Building Energy (WBHO-BE) under a fully-wrapped EPC contract within budget. REISA had previously achieved the Scheduled Commercial Operations Date (SCOD) on 15 August 2014 under its PPA and has since that date been operating at full capacity, successfully delivering electricity to the national grid.

The project brought together an investment consortium consisting of African Infrastructure Investment Fund 2 (AIIF2), the Infrastructural Development and Environmental Assets (IDEAS) Managed Fund, BuiltAfrica Kathu 75 Solar, Building Energy Development Africa and the Kathu Solar Community Trust.

REISA CEO, Richard Gordon, says “The shareholders in REISA recognise that effective infrastructure is vital for the economic growth and development of the African continent. This project has over 340,000 installed solar photovoltaic modules with a combined generating capacity of 75MWac and is producing energy under a 20-year PPA signed with the Single Buyer Office, delivering clean renewable energy to the Northern Cape and South Africa with a low environmental impact.”

AIIF2, managed and advised by African Infrastructure Investment Managers (AIIM), is the largest shareholder in the project. AIIF2 aims to draw value from the growing number of African infrastructure investment opportunities and, to date has made strategic investments in the energy, communications and transport sectors.

The IDEAS Managed Fund is managed by Old Mutual Alternative Investments, a boutique of Old Mutual Investment Group. The fund is the most successful investor in South Africa’s renewable energy program with 14 investments, and has delivered a return of 10% above inflation over 15 years.

The business of the BuiltAfrica Group involves developing and investing in electricity and energy projects in Sub Saharan Africa. Through BuiltAfrica Energy, it has been focused on renewable energy projects in South Africa and aims to become a leading developer and operator of sustainable utility infrastructure and energy assets on the continent.

Building Energy SpA, a global IPP with operations in four continents, was the sole sponsor of the project and holds a 10% stake in the project. Besides the joint venture with WBHO for the construction of the plant, Building Energy is also a shareholder in the Operator of the facility.

REISA has been advancing the development of the REISA Kathu Solar Photovoltaic (PV) Facility near the town of Deben (17km north-west of Kathu) in the Northern Cape since 2009. The Kathu Solar PV facility was one of the largest photovoltaic projects selected as a preferred bidder under Round 1 of the South African Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) in December 2011.

Local communities in close proximity to the project will benefit from dividends flowing to the Kathu Solar Community Trust over the 20-year project life, with the key focus being sustainable socio-economic development and economic upliftment. Community engagements meetings have been held to identify Beneficiary Trustees who will represent the community located within a 50km radius of the facility.  REISA also sponsored a number of local community goodwill projects during the construction period, predominantly focused on education, the environment and the elderly. 

For more, please see here.

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