Solar photovoltaic project in South Africa

Project profile
November 01, 2015

Our client

FirstRand Bank, acting through its Rand Merchant Bank division.

Project location

The project is located near Groenwater in District Hay, Northern Cape province, South Africa.

Awards

The sister Lesedi/Letsatsi projects won the PFI 2012 African Renewables Deal of 
the Year.

Project description

The Jasper project, undertaken by a consortium consisting of SolarReserve South Africa, the Kensani Group and Intikon Energy, and awarded preferred bidder status under the South Africa Renewable Energy Independent Power Producer Programme (REIPP), involved the development and construction of a 96MW (DC) solar photovoltaic plant in Groenwater, Northern Cape. The project will use more than 325,000 Yingli YL295P-35b multi-crystalline modules with a peak power rating of 295W and 78 INGECON SUN PowerMax central inverters with 1MW AC rated power and an advanced air cooling system.

Jasper is the consortium’s third solar photovoltaic project in South Africa, being a Round 2 project in the REIPP. The consortium is also responsible for the Lesedi and Letsatsi projects (each 75MW) undertaken in Round 1. Combined, the three projects will generate up to 238MW of renewable energy, enough clean energy to power over 80,000 homes and create approximately 900 construction jobs and 150 permanent operational jobs. During the construction phase the Jasper project is expected to create 300 jobs as well as 50 permanent and operational jobs, furthering the achievement of the South African government’s job creation and socio-economic development objectives. Once operational it is estimated that the plant will generate enough renewable energy to power more than 30,000 households and offset 145,891 tons of carbon dioxide from the atmosphere annually.

Status

Construction on the project commenced in 2013.

Matter value

ZAR2,004,829,000 (partially indexed)

Scope of work

Our team in Johannesburg advised FirstRand Bank Limited (acting through its Rand Merchant Bank division) in its capacity as mandated lead arranger in relation to the funding of the development of the Jasper project.

We advised on all aspects of the project, including:

  • debt financing
  • equity financing
  • grid connection
  • insurances, including panel insurances
  • construction, maintenance and operation
  • land, environmental and corporate
  • drafting all finance documents (including facilities agreement, intercreditor agreement, security documents, hedging agreements, performance guarantees, sponsor support and technical support agreements)
  • negotiating the debt and equity financing terms with the borrowers, shareholders, sponsors and their legal counsel
  • negotiating amendments to land documents, corporate documents and environmental issues with the Project Company and its legal counsel
  • managing and coordinating financial close of the project on behalf of the lenders.

Key issues

Google was provided US$12 million in equity investment in the project. Jasper is the first investment made by Google in Africa as part of its commitment to invest US$1 billion to accelerate the adoption of renewable energy technologies globally.

The project was partly funded by preference shares taken up by the senior lenders.

The senior lenders assisted the project company in offering a more competitive pricing to the off-taker, Eskom, by making available an inflation linked term loan facility in addition to a JIBAR linked term loan facility. As far as we know, it is the only project on the REIPP programme to be financed with an inflation linked facility.

Once completed, the Jasper power plant will be one of the biggest solar photovoltaic installations in Africa.