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SunEdison Closes US$314 million (R2.6 Billion) in Funding for 58 MW (AC) in South Africa Solar Projects

published: 2012-11-29 14:49

Projects in Limpopo Province to Create Local Jobs and Sustainable Energy to Provide Long-Term Economic Support to Region

SunEdison, a leading worldwide solar energy services provider and subsidiary of MEMC Electronic Materials (NYSE: WFR), in partnership with Chint Solar, the Public Investment Corporation, and the Kurisani Youth Development Trust, announced that it has closed US$314 million (R2.6 Billion) in long-term debt and equity financing for two utility solar projects in Limpopo Province, South Africa. Standard Bank and Futuregrowth Asset Management are the two senior debt providers supporting both projects. 

The two projects total 58 megawatts MW (AC). Witkop Solar Park (30 MW AC) and Soutpan Solar Park (28 MW AC) will be the first utility scale solar projects to be implemented in Limpopo Province. Under the terms of the financing agreement, power generated from the two facilities will be purchased by Eskom, the national utility in South Africa, through a 20-year power purchase agreement (PPA). The Soutpan Solar Park is expected to interconnect in January of 2014, while the Witkop Solar Park is forecast to interconnect in April of 2014. Construction of both projects is expected to begin in January of 2013.

Prior to committing to the projects in South Africa, SunEdison performed extensive tests and models to determine the optimal design and projected output of the facilities. Once the projects are operational, they will be monitored around the clock by SunEdison's fleet-wide Renewable Operations Center (ROC). The ROC will leverage the SunEdison Environmental & Energy Data System (SEEDS) to help maximize the efficiency of the facility by tracking its actual performance against its predicted output.

"As a world leader in renewable energy, we understand our projects have a transformational impact on the lives of millions of people. We are delighted that our investments in South Africa will create employment and stimulate business investment," said Pashupathy Gopalan, SunEdison Vice President and Managing Director for South Asia and Sub-Saharan Africa. "The energy delivered by these projects will sustain economic growth bringing both social and fiscal benefits. We are committed to this region and will continue to build our local team moving forward."

Chint Solar is a member of the Chint Group, which manufactures low-voltage electrical products, as well as solutions for transmission and distribution, instruments and meters, industry automation and solar energy, and specialised products for the construction sectors. Dr. Chuan Lu, the Vice President of Chint Solar, said the projects would help to demonstrate the potential of solar power to create jobs and stabilise the electricity supply. "South Africa has higher solar irradiance than other countries which have invested heavily in solar power, such as Germany. Chint Solar has been continuously keeping its commitment to developing solar energy around the world. We are confident that in the years to come, more solar energy projects will be announced, furthering energy security in the region," Dr. Lu commented.

The Public Investment Corporation (PIC) is one of Africa's largest investment managers, with assets under management of over US$130 billion (R1.17 trillion). "The Public Investment Corporation always seeks to invest in projects that aim to achieve the Government Employee Pension Fund's dual objective of investing for financial return and for positive social, economic, and environmental results," said Dr. Dan Matjila, the PIC's Chief Investment Officer. "PIC is passionate about environmental sustainability and contributing towards cleaner energy and a greener economy, hence we saw value in this investment. Over and above that, PIC is pleased that this investment will contribute immensely to job creation, particularly in Limpopo. The project is expected to create 318 jobs during construction, and 55 jobs on an on-going basis, with 44 of those designated for historically disadvantaged individuals. This investment will stimulate much-needed economic activity, thus directly contributing to the country's economic development agenda."

Standard Bank, Africa's largest bank by assets, has extensive experience in financing renewable energy projects. Ziyaad Sarang, Executive, Mining Energy and Infrastructure at Standard Bank said: "We are delighted with Standard Bank's involvement as the Mandated Lead Arranger in these deals, which sees SunEdison, the Chint Group and PIC making investments into South Africa in renewable energy. This transaction goes to the heart of Standard Bank's core strategy of encouraging investment in power and infrastructure development in our home market, Africa, and serves to highlight our commitment to the continued development of clean energy projects."

Futuregrowth Asset Management, a subsidiary of Old Mutual, oversees US$13.3 billion (R115 billion) in fixed-income investments. Futuregrowth portfolio manager Mei-Chi Liou said that the firm is excited about investing in the renewable energy sector because it will provide South Africa with a sustainable energy source while offering pension funds access to a new asset class with good returns. "We applaud the efforts of government and other involved parties to ensure the economic benefits are spread as widely as possible within a sound legal framework. We are particularly delighted to partner with SunEdison and the Chint Group, in a mutually beneficial relationship that will bring upliftment to the area."

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