DEG finances solar power plant in South Africa

08 Apr 2019

Green electricity to be supplied to some 180,000 households

Emerging economies need a reliable electricity supply for their economic development. However, economic growth can push electricity production to its limits, resulting in frequent power outages. This also applies to South Africa. For this reason, DEG – Deutsche Entwicklungs- und Investitionsgesellschaft is committed to the expansion of electricity generation and focuses on renewable energies. The concentrated solar power plant (CSP) Kathu Solar Park (KSP) in the South African province of the Northern Cape, co-financed by DEG, has now been connected to the grid. As part of a long-term Power Purchase Agreement (PPA), the solar power is fed into the state grid.

Installation with a capacity of 100 MW

DEG is involved in Kathu both through the Metier investment company and as a co-investor, while the plant is operated by its main shareholder, European based energy producer Engie. Further investors include Dutch development finance company FMO and South African state-owned Public Investment Corporation. The total investment volume amounts to around R12 billion (approx. EUR750mn).

6 million tonne reduction in CO2

The installation contains almost 400,000 solar panels and, with a capacity of 100 MW, can meet the energy requirements of some 180,000 households in South Africa. In addition, a thermal energy storage system allows energy to be supplied reliably after sunset. By replacing conventional energy generation, this will allow some six million tonnes of CO2 emissions to be avoided over the next 20 years.

Kathu was developed as part of the Renewable Energy Independent Power Producer Programme (REIPPP). Initiated by the South African government in 2011, this programme aims to boost power generation capacity, to create jobs and to increase the share of South Africa’s energy mix represented by renewable energies.

Around 1,700 people were employed during the construction phase. 42% of them came from the surrounding area. There will be around 80 permanent employees responsible for the day-to-day operation of the solar power plant.

One of DEG’s main areas of focus is financing schemes that increase the use of climate-friendly technologies in developing and emerging countries. DEG's portfolio energy supply companies thus ensure already today CO2 emission savings of around 20 million tonnes per year.

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