US bank to invest R5.4bn in SA solar plant

London - Overseas Private Investment Corporation (Opic), the US government’s development bank, will invest up to R5.4bn in a solar thermal plant in South Africa.

The Redstone solar project is being developed by Santa Monica, California-based SolarReserve and ACWA Power, a Saudi Arabian electricity producer.

It will be located in the Northern Cape.

The funds from Opic will be used as an investment guarantee to build and operate the solar plant.

The project is financed by R5.6bn in debt and R2.4bn in equity from both local and international lending institutions, according to SolarReserve’s website.

Opic is part of Power Africa, an initiative founded by President Barack Obama in 2013 to support the growth of energy access in Sub-Saharan Africa.

The financial institution has pledged to provide $1.5bn of financing and insurance to energy projects across the region by 2018.

South Africa has set a target to build 3.7 GW of clean energy under its Renewable Energy Independent Producer Programme.

The Redstone solar project will provide electricity to over 200 000 homes during peak demand once complete.