(Reuters) – South Africa signed agreements on Thursday with Norway-based renewable energy company Scatec for three solar and battery storage projects that it hopes will start to ease a crippling electricity shortage.
The projects form part of a much-delayed emergency procurement round launched two years ago in response to severe power cuts by struggling state-owned utility Eskom.
The Scatec projects are the first for which agreements have been signed after eight preferred bidders were announced more than a year ago, but they represent only a sliver of the 2,000 megawatt (MW) capacity that government had targeted.
None of the preferred bidders have signed deals with the government as the tender has been hobbled by court cases and challenges by environmental activists.
Scatec’s projects will provide 150 MW of dispatchable renewable energy from 05:00 in the morning to 21:30 at night, Scatec said in a statement.
The Department of Mineral Resources and Energy said the projects had attracted 16 billion rand ($1 billion) in investment and would create around 5,000 jobs during the construction and operation phases.
The projects are expected to deliver electricity within 12 to 18 months of financial close, which is anticipated by the end of July. Scatec will own 51% of the projects, with H1 Holdings, a local Black Economic Empowerment partner, owning 49%.
When the government announced the preferred bidders in March 2021 it said it hoped the first power from the emergency round would be connected to the grid from August 2022.
($1 = 15.4846 rand)
(Reporting by Anait Miridzhanian in Gdansk; Additional reporting by Wendell Roelf in Cape Town; Editing by Alexander Winning and David Holmes)
