Abengoa Khi Solar One and Abengoa Kaxu Solar One

Project profile
August 14, 2015

Our clients

Abengoa Solar International and Industrial Development Corporation as sponsors to the project and borrowers.

Project locations

Khi Solar One is located on a 600 ha site close to Upington, in the Northern Cape province, South Africa.

KaXu Solar One is located near the town of Pofadder in the Northern Cape province, South Africa.

Project descriptions

Abengoa Solar International is a market leader in renewable energy technologies including concentrated solar power technologies. They are one of the large international developers that have successfully bid under the South African government’s renewable energy IPP procurement (REIPPP) programme which is set to very tight time scales. The Industrial Development Corporation of South Africa Limited is South Africa’s largest development finance institution and plays a role in building the industrial capacity that fuels the country’s economic growth.

Khi Solar One and KaXu Solar One are renewable energy projects that utilise concentrated solar power (CSP) technology, which uses mirrors to concentrate the thermal energy of the sun to drive a conventional steam turbine.

Khi Solar One, a 50MW steam receiver power tower CSP plant, will be Abengoa’s third commercial CSP tower and its first outside of Spain. The tower is 205 metres tall, uses more than 4000 latest generation heliostats and covers 300 hectares. This plant represents important technological advances in CSP tower efficiency in the form of superheated steam, dry cooling and a two hour steam storage system, which together result in increased efficiency and availability and a dramatic reduction in water consumption.

KaXu Solar One, a 100MW CSP parabolic trough plant, covers 1km squared with approximately 1200 mirrored parabolic trough collectors and a storage capability for approximately 2.5 hours. The plant involves a field of pivoting concave mirrors tracking the sun and concentrating the reflected sunlight onto a closed-circuit network of piping that contains synthetic oil. The heated oil is cycled through a steam-creating generator to drive a 100MW net capacity turbine.

Both projects are majority owned by Abengoa Solar International through special purpose vehicles established in South Africa, with the remainder of the shareholding being taken up by the Industrial Development Corporation of South Africa Limited and smaller black economic development partners.

Scope of work

Advised Abengoa Solar International and the Industrial Development Corporation as Sponsor’s and Borrower’s legal counsel in respect of the development, structuring, construction, operation and debt and equity financing of:

  • a 100MW ‘trough’ concentrated solar power project selected as preferred bidder under Round 1 of the REIPPP programme in South Africa that has reached financial close
  • a 50MW ‘tower’ concentrated solar power project selected as preferred bidder under Round 1 of the REIPPP programme in South Africa that has reached financial close.

Main highlights

Both projects were selected as preferred bidders under round 1 of the REIPPP programme in South Africa. The size of the funding requirements together with the complexity of new CSP technologies (utilising both the ‘tower’ and ‘trough’ technologies for CSP projects) made these extremely challenging transactions particularly in light of the strict compliance requirements in the request for proposals under the REIPPP programme initially issued by the South Africa Department of Energy in August 2011.

The projects will not only provide a clean energy future for South Africa, but will also bring economic development to the Northern Cape region.

Khi Solar One will prevent approximately 183,000 tons of CO2 emissions per year. An average of 600 construction jobs will be created during the construction period and around 35 permanent plant operations employees.

KaXu Solar One will prevent approximately 315,000 tons of CO2 emissions each year. About 800 jobs will be created during the construction period, with about 35 permanent plant operations jobs to follow. Around 200 direct and indirect full-time jobs per year will be created in the local community.

Khi Solar One and KaXu Solar One contribute to South Africa’s goal to introduce up to 17,800MW of renewable energy by 2030 and reduce its dependence on oil and natural gas by diversifying the energy mix in the country.