UK Climate Investments supports clean energy projects in South Africa

The projects are expected to be completed by the end of 2020 and provide enough clean energy to power nearly 200,000 homes each year.

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The UK Climate Investments Impact fund (UKCI) in partnership with H1 Holdings has announced an investment of about US$17 million in wind energy projects across South Africa.

The Round 4 projects with a total capacity of 254MW are: the 140MW Kangnas Wind farm in the Northern Cape province, the 110MW Perdekraal East Wind farm in the Western Cape province and the 4MW Kruisvallei Hydro project in Free State province.

The projects are expected to be completed by the end of 2020 and provide enough clean energy to power nearly 200,000 homes each year. During their lifetime, they will help avoid approximately 844,000 tonnes of greenhouse gas emissions per annum.

The financing will be provided through an innovative funding mechanism developed by UKCI in close consultation with H1 Holdings and designed to support Black Economic Empowerment (BEE) entities. The finance is for investment in projects that are being developed by Mainstream Renewable Power and Building Energy. H1 Holdings is a majority black-owned and managed developer of renewable energy projects established in 2000.

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“Over 90% of electricity generation capacity in South Africa currently relies on fossil fuels. Our partnership with H1 Holdings supports the country’s transition to a new energy mix – promoting cleaner growth in southern Africa’s largest economy whilst stimulating economic development in rural areas and supporting increased BEE participation in the renewables sector,” said Richard Abel, Managing Director of UKCI.

In addition to promoting cleaner growth, the projects will stimulate rural development by employing and training at least 40 per cent of construction, operations and maintenance staff from local communities.

Reyburn Hendricks, Chief Executive Officer of H1 Holdings, said: “H1 Holdings is proud to be working with UK Climate Investments on promoting access to cleaner electricity in southern Africa. Energy is a highly capital-intensive industry and access to finance is a challenge across the industry for all players. Our partnership will help to address the need for new generation capacity in South Africa.”

The South African Government recently underlined that secure energy supply is essential for the country’s economic development, and that it was committed to expanding the availability of renewable power.

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“I’m delighted that the British Government is supporting this, through UK Climate Investments and their partners, through this significant investment in three renewable energy projects. In this way, the British Government is simultaneously supporting the low carbon transition, and economic transformation, in South Africa,” said Nigel Casey, British High Commissioner to South Africa.

The UK is a world leader in the global transition to a low carbon future. UK expertise in renewables will be key to meeting the UK Government’s ambitious target of net zero emissions by 2050 and supporting emerging countries response to the challenges and opportunities of climate change.

The investment represents UKCI’s second commitment in Sub-Saharan Africa and fifth investment in total.

UKCI is a joint venture between the Green Investment Group and the UK Government’s Department for Business, Energy and Industrial Strategy. UKCI forms part of the UK aid funded International Climate Finance and is managed by the Macquarie Green Investment Group.