ACWA Power (ACWA) announced on May 10 that it has reached the financial close for the Redstone Concentrated Solar Power Plant (Redstone CSP) in South Africa. The funding of this project has come to nearly ZAR 11.6 billion. Based in Saudi Arabia, ACWA builds various types of power plants and desalination facilities around the world. A concentrated solar power (CSP) plant uses parabolic mirrors or lenses to direct sunlight onto a receiver. There, the concentrated light is then converted into heat that drives a power generator.
ACWA is one of the major shareholders in Redstone CSP. According to the coverage provided by other media outlets, the other major shareholders are the Central Energy Fund and Pele Green Energy. Both entities are based in South Africa. Located in North Cape Province of South Africa and spanning an area of 648ha, Redstone CSP is designed to have a generation capacity of 100MW and is set to enter commercial operation in the fourth quarter of 2023.
To address the issue of intermittency, the CSP plant will have a 12-hour thermal energy storage system so that it will be able to meet the power demand of nearly 200,000 homes 24/7. The same molten salt thermal energy storage technology is featured in the Bokpoort Concentrated Solar Power Plant (Bokpoort CSP), which was also built by ACWA and achieved a new African record for the duration of continuous power delivery for this type of renewable technology. Bokpoort CSP is located in North Cape as well.
The amount of foreign direct investments that was facilitated by Redstone CSP came to around ZAR 7 billion. This shows that South Africa’s energy transition strategy is being actively supported by both domestic and international finance. The backers of Redstone CSP include African Development Bank (AfDB), ABSA Bank, Development Bank of Southern Africa (DBSA), CDC Group, Nedbank, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), Deutsche Investitions- und Entwicklungsgesellschaft (DEG), Investec Bank, and Sanlam Life Insurance.
It should be noted that the development of Redstone CSP has not been progressing smoothly. The reports from other media outlets stated that the project was supposed to begin as early as 2016, but Eskom delayed the arrangement of the PPA to 2018. Eskom is a utility owned by the South African government. Then in 2019, SolarReserve, which was ACWA’s partner on this project, declared bankruptcy and caused more complications in the financing of the project. Hence, the financial close was finally achieved about five years later.
Besides providing clean and renewable energy, Redstone CSP is expected to create lots of employment opportunities and contribute to the formation of a local supply chain. The socioeconomic benefits of the project that ACWA has listed include nearly 44% local content on procurement during construction, 2,000 new construction jobs at peak with around 400 from the local community, and 100 new long-term jobs related to the O&M of the project. ACWA has also stated that Redstone CSP has been certified under the Climate Standard and Certification Scheme and confirmed to support the goals of the Paris Climate Agreement. Once in operation, the power plant will reduce an estimated 440MT of CO2 emissions annually.
Additionally, Redstone CSP will provide ancillary services at no cost to Eskom. This arrangement is the first in South Africa, and ACWA calls it an “implicit social contract”.
Commenting on the financial close, Paddy Padmanthan, president and CEO of ACWA, said that Redstone CSP is the largest renewable energy investment in South Africa to date. Padmanthan added that further improvements to the country’s grid system, together with the “ingenuity of the private sector” and the “support of experienced financial partners”, will bring about positive and lasting transformation for local communities and make them more resilient against the effects of climate change.