SECTOR INSIGHTNorwegian
SECTOR INSIGHTNorwegian funds are beingdeployed to harness the sun.EnergyWheeling hascome to theNorthern Cape.South Africa’s largest private-offtake wind farm has reachedcommercial operation. The 89MW Castle Wind Farm is locatednear De Aar, already a hub for solar-energy projects, andwill wheel power to Sibanye-Stillwater’s mining operationsin other provinces through the Eskom Hydra Main TransmissionSubstation, 25km away from the project site.Wheeling does not actually send the electrons from the powerplant to the offtaker; rather it is a book entry whereby the poweris created at De Aar and credited to the mine where Sibanye-Stillwater chooses to use it.The Castle consortium is led and co-sponsored by AfricanClean Energy Developments (ACED), with African InfrastructureInvestment Managers (AIIM) IDEAS Fund and Reatile Renewables asshareholders. AIIM is a division of Old Mutual Alternative Investments(OMAI). ACED and AIIM affiliate, Energy Infrastructure ManagementServices Africa (EIMS Africa), will manage the project duringoperations. Rand Merchant Bank (RMB), a division of FirstRand BankLimited, is the sole mandated-lead arranger for the project.Castle is one of two renewable energy projects that the ACEDconsortium and Sibanye are executing together, with the 140MWUmsinde Emoyeni Wind Farm in the Western Cape due to reachcommercial operation in late 2026.A recent solar project in the De Aar area, the 75MW Du PlessisDam Solar PV2 project, has been constructed with domestic andinternational financing. Energy trader Etana Energy had previouslysecured a R1-billion payment guarantee facility with Standard Bank anda preference-share investment ofup to R372-million from Norfund,the Norwegian Investment Fundfor developing countries, andStandard Bank. The project, whichis jointly developed by Mulilo andH1 Holdings reached financialclose in March 2025.The nearby De Aar Solar Powerproject, located in the sameEmthanjeni Local Municipality asthe Du Plessis Dam scheme, is oneof first facilities that was createdwhen national governmentcreated the Renewable EnergyIndependent Power ProducerProcurement Programme (REIPPPP).Construction teams set to work inDecember 2012 and the projectreached commercial operations inthe middle of 2014. In a year, theproject generates enough clean,renewable electrical energy topower more than 19 000 SouthAfrican homes. Located 6km outsideof De Aar, the project expandsover 100ha.Globeleq is the lead developer,owner and operator with ThebeInvestment Corporation being aninvestor. The Sibona Ilanga Trustis a local community body thatcarries out public-benefit activitiesin sectors such as enterprisedevelopment, education andhealth. The facility has generatedprocurement opportunitiesfor local businesses and theEnterprise Development unit hassupported ventures such as J & JoFastfoods, pictured.NORTHERN CAPE BUSINESS 2025/2640PHOTO: AECD
OVERVIEWGrid capacityIn less than a decade, an entirely new sector has been createdthrough the REIPPPP and legislation that invited local and foreigninvestors to bid for and then build renewable energy generationplants. South Africa’s National Development Plan (NDP) requires20 000MW of renewable energy by 2030. However, the mostrecent bid window has come up against the fact that the country’stransmission grid can only cope with so much new capacity.The first project to reach commercial operations from an earlierbid window, Round 4, was the Kangnas Wind Farm, a 140MW projectnear Springbok. Somewhat delayed by the Covid-19 lockdown, theproject ultimately provided 550 jobs when construction work peakedand reached a local content level of 45%. This included the megatransformerand the wind-turbine towers.Approximately 60% of the projects so far allocated have been inthe nation’s sunniest province. Projects such as Kathu Solar Park, aconcentrated solar power project, and the Roggeveld Wind Farm areindicative of the large scale of most of the energy generation that isbeing rolled out.The Northern Cape is the natural home for the generation of solarpower. Long-term annual direct normal irradiance (DNI) at Upington is2 816kWh/m 2 , according to a survey done for Stellenbosch Universityby Slovakian company GeoModal Solar.With 14 000km of new high-voltage powerlines needing tobe installed in South Africa by 2032, the news that a new privatecompany, the Green Transmission Company, is tackling a 1GWrenewable energy connection project that stretches over more than100km is good news indeed.ONLINE RESOURCESIPP projects: www.ipp-projects.co.zaSouth African Independent Power Producers (IPP) Association:www.saippa.org.zaSouth African Photovoltaic Industry Association: www.sapvia.co.zaSouth African Wind Energy Association: www.sawea.org.zaGreen hydrogenThe province has a GreenHydrogen Strategy, which waslaunched at COP26 in Glasgow in2021, and a national programme,the Green Hydrogen NationalProgramme (GHNP), has beengazetted. A series of projectslocated across the country areexpected to attract investments ofclose to R600-billion. Of the nineprojects identified by GHNP, fourare located in the Northern Cape:• Prieska Power Reserve• Ubuntu Green Energy HydrogenProject• Upilanga Solar and Green H2Park• Boegoebaai Green HydrogenDevelopment Programme.All of these projects have beenregistered with InfrastructureSouth Africa (ISA), the body withinthe national presidency whichis keeping track of and promotinginfrastructure development inthe country. Another projectin the Northern Cape, theEnertrag Postmasburg Project(ammonia), is in the ISA pipeline,awaiting approval.A national project to identifyStrategic Transmission Corridorshas included an important routethrough the Northern Cape.The Northern Corridor begins atSpringbok in the west and runsthrough Upington and Vryburgon the way to Johannesburgin Gauteng. Each of those townswill be the focus of a RenewableEnergy Development Zone(REDZ), with the other REDZin the province allocatedto Kimberley. ■PHOTO: Globeleq41NORTHERN CAPE BUSINESS 2025/26
