Tronox Mineral Sands, an American Mineral Sands mining company with operations in South Africa, has signed what is thought to be the largest Independent Power Producer agreement for the construction of two 100MW projects aimed at meeting 13% emission reduction targets. Construction is set to begin after the company reached an R4 billion financial close on a deal for both construction and development with Patrice Motsepe’s African Rainbow Energy and a funders syndicate.
Tronox began planning and registering their projects with the National Energy Regulator of South Africa (Nersa) earlier this year, after the government raised the generation licence exemption threshold from 1MW to 100MW in a desperate bid to get IPPs onto the grid last year.
The projects will be developed in collaboration with the SOLA Group, a vertically integrated renewable energy company that includes SOLA Build and SOLA EPC. SOLA Build has built over 30 MW of embedded-generation solar PV projects, mostly for the private sector, according to their website, and SOLA Assets has developed over 305 MW of solar PV projects in Africa, making it one of South Africa’s largest solar companies.
Public-Private Partnership
African Rainbow Energy is the largest shareholder in SOLA Group. Its partners are Absa, Nedbank, Standard Bank and the Development Bank of Southern Africa (DBSA). The syndicated group of bankers has provided the majority of the debt for the projects (R3.1 billion). The projects, which will be located in the Ditsobotla Local Municipality of the North West, will provide electricity to five Tronox facilities in the Western Cape and KwaZulu-Natal. A wheeling agreement has been reached, with power from the projects being wheeled onto Eskom’s grid.
