SolarReserve, Kensani and Intikon complete $260 million solar project financing

SOUTH AFRICA: The development consortium consisting of SolarReserve, a US developer of utility-scale solar power projects; the Kensani Group, an experienced empowerment investment player in South Africa; and Intikon Energy, a South African developer of renewable energy projects, has successfully closed project financing for the Jasper Solar Energy Project, a 96 megawatt (MW DC) solar photovoltaic (PV) project.

The Jasper Project, located in the Northern Cape of South Africa near the town of Kimberly, was selected by the South Africa Department of Energy (DOE) in May of 2012 in the second round of bids under the South Africa Renewable Energy Independent Power Producer Procurement Program (REIPPPP).

Upon completion, the Jasper Project will be one of the largest solar installations on the continent and will help South Africa meet its renewable energy targets, stimulate long-term economic development, create jobs and power more than 30,000 South African homes. The project also marks Google’s first renewable energy investment in Africa.

“We are proud to be part of South Africa’s progressive program to advance clean energy. Our Jasper project will provide substantial, long-term economic benefits to region and help the country meet its
impressive clean energy goals,” said Kevin Smith, CEO of SolarReserve.

“The South Africa government’s advanced energy projects are allowing the country to quickly become a model for not only the rest of the continent, but for the world. We look forward to continuing our work on Jasper and on our other photovoltaic and solar thermal projects in development in South Africa.”

The Jasper Project financial close comes during a time in which the country has seen massive growth in renewable energy. Spurred by a transformative government-established renewable energy program,
South Africa leads the renewable energy race with the highest growth in clean energy in the world in 2012, making it a prime destination for continuing clean energy investment.

In November 2012, the consortium led by SolarReserve, Kensani Group and Intikon Energy closed $586 million (ZAR 5.15 billion) in financing for two 75-megawatt solar PV projects located in South Africa’s Free State and Northern Cape, the Letsatsi Project and the Lesedi Project, set to deliver energy to more than 50,000 homes by mid-2014.

Rand Merchant Bank (a division of FirstRand Bank Ltd) acted as Mandated Lead Arranger and Bookrunner for the Jasper Project’s debt funding requirements. Equity investment for the project was
provided by Google, the Public Investment Corporation (PIC), Kensani Capital Investments, SolarReserve, Intikon, Development Bank of South Africa, and the P.E.A.C.E. Humansrus Fund, with Rand Merchant Bank providing preference share equity. International law firm Baker & McKenzie supported the project activities through its offices in Johannesburg and the United States, with Kensani Eaglestone Capital Advisory acting as financial adviser.

Google participated in the project by becoming an equity investor at the financial close and will help fund the project during construction. Google has invested heavily in the renewable energy industry; since 2010, the company has committed more than $1 billion to investments in renewable energy projects worldwide capable of producing two gigawatts of power.

"The Jasper Power Project and other projects being developed through the REIPPPP have the potential to transform the South African power grid, and we're proud to be a part of that effort," said Rick Needham, Google's director of Energy and Sustainability. The Jasper project has executed a 20-year power purchase agreement with Eskom, the South African power utility. The project cost of approximately ZAR2.3 billion ($260 million) will make this one of the single largest PV projects in Africa.

The Jasper project is located adjacent to the 75 MW Lesedi Solar Energy Project, which broke ground in February 2013. The Jasper and Lesedi Projects, along with the Letsatsi Project located near Bloemfontein, put the consortium’s total portfolio of successful solar projects at 244 MW, accounting for a 20 percent share of South Africa’s solar energy market.