IFC partnered with Abengoa Solar in South Africa to provide an innovative financing package to support the construction of the region’s first concentrated-solar power (CSP) plants, a technology that uses mirrors to reflect and concentrate rays of sunlight to heat steam that can power turbines. Abengoa’s projects in South Africa consist of two greenfield CSP plants, the KaXu and the Khi, and introduce a renewable energy in a country with supply and demand imbalances and where coal-fired power is predominant. The KaXu project will consist of a 100 MW parabolic trough CSP plant, while the Khi will be a 50 MW steam receiver power tower. Both plants will sell electricity to the state owned utility Eskom under 20-year power purchase agreements.
IFC & Abengoa Solar S.A.
IFC’s participation with Abengoa included two separate loans to the CSP project companies: $125 million for the KaXu project, and $75 million to the Khi project.
Environment & Health Abengoa’s CSP plants will prevent nearly 500,000 tons of CO2 emissions per year, with KaXu and Khi helping to avoid 315,000 and 183,000 tons respectively. There will also be reductions in local air pollutants NOx and SOx, which are associated with coal-fired power generation.
Economic The KaXu and Khi projects are expected to generate 800 and 600 jobs respectively during the construction periods with around 35 permanents jobs created for each plant’s operations. The KaXu plant is expected to generate an additional 200 direct and indirect permanent jobs in the local community near the town of Pofadder.
Energy Diversification The investments in the KaXu and Khi plants will help South Africa meet its renewable energy targets – 17,800 MW by 2030 – by diversifying the energy mix there and reducing reliance on fossil fuel sources. The expanded generation capacity is also expected to help avoid power cuts that are a result of the supply and demand imbalances there.