Mainstream group poised to invest €660m in South African wind farm plan

Deal to make Irish company South Africa’s biggest renewable energy developer

Mainstream Renewable Power’s 50-megawatt solar farm in Droogfontein, South Africa. The company looks set to secure a deal to build three wind farms in the country’s Northern Cape region.

Mainstream Renewable Power’s 50-megawatt solar farm in Droogfontein, South Africa. The company looks set to secure a deal to build three wind farms in the country’s Northern Cape region.

 


Mainstream Renewable Power is leading a consortium that looks set to secure a deal with the South African government to build three wind farms in the country’s Northern Cape region at a cost of about €660 million.

Mainstream confirmed yesterday that South Africa’s department of energy had named its group as the preferred bidder to build, under the third round of its green energy programme, the three wind farms, which will have the capacity to generate up to 360 megawatts (MW) of electricity.

The three locations will require a total investment of about €660 million, Mainstream said yesterday.

The Irish company and its partners are borrowing the cash needed and have lined up three lenders – Barclays, the Development Bank of Southern Africa and Danish export credit agency EKF – to provide it.

Preferred-bidder status means the contract’s award is subject to the Mainstream-led consortium bringing the three projects to financial close – that is, confirming the required funding is in place.

The company expects this will be done by next August and that construction should begin shortly afterwards.


Partners
The other partners in the consortium, all local, include Genesis Eco Energy, Thebe Investment Corporation, Old Mutual Investment Group and Futuregrowth Asset Management.

The group has bid to build two 140MW farms in Namakwa in the Northern Cape and an 80MW facility in Umsobomvu in the same region.

A Mainstream spokesman said yesterday that, in common with the Republic and most EU states, renewable energy generators received guaranteed payments for the electricity they produced.

Two years ago, South Africa awarded a consortium led by Mainstream and China’s Suntech Corporation preferred bidder status for wind and solar projects with a capacity of 238MW. The company said yesterday those three projects were on schedule to be completed and begin supplying power next year.


‘Leading developer’
Mainstream chief executive Eddie O’Connor welcomed the latest announcement. “I understand the quality was very high; there were 93 bids submitted, only 17 were successful today and we won three of those,” he said. “Mainstream is now the leading developer of renewable energy in South Africa.”

Three years ago, South Africa decided to step up the development of green energy. Its government wants 42 per cent of its electricity to come from renewable sources by 2020.

It plans two further rounds of tenders for bids from the private sector to develop more renewable energy generators in the near future. The scheme’s rules require that overseas bidders work in partnership with local companies.