Abengoa closes $660m financing deal for South African solar power project

Spanish firm Abengoa has secured $660m as non-recourse project financing for Xina Solar One project in South Africa, along with its partners.

The 100MW solar thermal project is under stages of construction at the Northern Cape Province in the country.

Construction for the facility, which is expected to involve a total investment of $880m, was initiated last year.

Financing for the project has been provided by financial institutions including the African Development Bank, the International Finance Corporation, Industrial Development Corporation and the Development Bank of Southern Africa.

Local investment banks like Nedbank have also been a part of the project financing agreements.

Featuring parabolic trough technology, the project will house a five-hour thermal energy storage system that will utilise molten salt.

Once operational, the facility will be able to power more than 95,000 households in the US. The facility is also expected to bring down 348,000 tons of annual CO2 emissions.

Power produced from the facility will be supplied to the Eskom power utility, according to a 20-year power-purchase agreement.

The Spanish corporation owns 40% stake in the solar project, with the remaining interest owned by the Industrial Development Corporation, the Government Employees Pension Fund represented by the Public Investment Corporation and Kaxu Community Trust.