The project came about in response to the new Renewable Energy Independent Power Producer Program (REIPP), a South African government initiative that aims to increase investment in renewable energy production, especially solar power, with a goal of having 3725MW online by 2016.
By involving two local firms as co-sponsors along with its U.S. investors, the project will also help South Africa meet the Black Economic Empowerment (BEE) objectives of the program.
The Board of Directors of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, approved up to $250 million for the agency’s first solar power project in South Africa, a 60-megawatt plant that will help diversify the country’s electricity generation beyond its heavy coal concentration and in the process displace approximately 140,000 tons of greenhouse gas emissions in its first year alone.
The OPIC financing will enable two U.S. companies, MEMC Electronic Materials and its subsidiary SunEdison, to construct and operate a solar photovoltaic plant in Boshoff in South Africa’s Free State province. All electricity generated by the plant will be sold to the national grid through a power-purchase agreement.
Coal-fired plants currently produce 84 percent of South Africa’s electrical generation capacity. SunEdison estimates that in the first year alone approximately 140,000 tons of greenhouse gas emissions will be displaced because of the project.
“South Africa’s ambitious and impressive renewable energy program has established the country as a leader in the field,” said OPIC President Elizabeth Littlefield. “We’re pleased to work with an experienced developer such SunEdison to deliver so many developmental benefits for South Africa, from the reduction of pollution and displacement of GHG emissions to the creation of local jobs and the realization of the country’s BEE program goals.”
MEMC, based in St. Peters, Missouri, is a major global manufacturer of PV wafers and related products for the semiconductor and solar industries. Through its SunEdison subsidiary acquired in 2009, MEMC is also a developer of solar power projects and is a leading solar energy services provider.
OPIC is the U.S. Government’s development finance institution. It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.
Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide. To date, OPIC has supported more than $200 billion of investment in over 4,000 projects, generated an estimated $75 billion in U.S. exports and supported more than 276,000 American jobs.