Absa contributes to the first utility-scale renewable energy captive power project in South Africa
Absa Group Limited
The 200MW project will be the first utility scale renewable energy captive power project in South Africa. It is expected to reduce Tronox's global carbon emissions by approximately 13%. The transaction adds to Absa's growing renewable energy portfolio, now measuring over 3.1GW.
Absa acted as joint mandated lead arranger and lender for South Africa’s first utility scale renewable energy captive power project, comprising 200MW of solar power, which will be built in the North West province in South Africa, at an estimated cost of approximately R4.1bn.
The 200MW project (comprising of two projects of 100MW each), developed by Sola Group of South Africa, will supply power to Tronox Holdings Plc’s South African operations, Tronox SA, under a long-term power purchase agreement, assisting Tronox to reduce its reliance on fossil fuel power and in line with its strategy to reduce carbon emissions. The project is expected to reduce Tronox’s global carbon emissions by approximately 13%.
“Absa is proud to be associated with this project, where financing is in line with the bank’s own sustainable finance goals, which include assisting clients on their journeys to transition from fossil fuels to renewable energy sources, thereby significantly reducing greenhouse gas emissions”, says Shaun Moodley, Principal within Absa’s Resource and Project Finance team.
Tronox SA is one of the largest heavy mineral sands producers in South Africa and operates in KwaZulu-Natal and the Western Cape. It mines sand deposits and processes the heavy mineral sands-bearing concentrates at its mineral separation facilities. Its products include titanium slag, a feedstock in the manufacturing of titanium dioxide pigment mainly used in the paint and plastic industries and zircon, which is mainly used in the ceramics industry.
The project will supply electricity, through wheeling arrangements with Eskom, to five of Tronox SA’s facilities in the Western Cape and KwaZulu-Natal. Tronox SA’s operations are energy intensive and based on a competitive energy tariff secured through the structure, will contribute to significant savings in Tronox’s energy costs.
The transaction adds to Absa’s growing renewable energy portfolio, now measuring over 3.1GW, including Absa’s participation in Eskom’s renewable energy programme, cementing the bank’s leadership in the sector.
Source: Absa newsroom