Speech by Minister of Trade and Industry, Dr Rob Davies during the launch of R5 billion Solar Power Plant in the Northern Cape

Program Director
Premier of the Northern, Cape Ms. Sylvia Elizabeth Lucas;
Minister of Trade and Commerce Saudi Arabia, Dr Tawfiq Fawzan Arabiah;
Chairman of ACWA Power, Mr. Mohamed Abunayyan

We are here today to witness the significant moment of the inauguration of the ACWA Power Solafrica Bokpoort Concentrated Solar Power Plant. This investment is welcomed by South Africa. The R 5 billion, 50 MW Concentrated Solar Power plant forms part of South Africa’s Renewable Energy Independent Power Producers Procurement Program (REIPPP) and this project marks a key milestone in South Africa’s electricity supply security and CO2 reduction. With its record 9.3 hours thermal energy storage capacity the Bokpoort CSP Project will provide electricity to approximately 21,000 households during day as well as night time and save approximately 230,000 tons of CO2 equivalent emissions during every year of operation.

This project needs to be celebrated for a number of reasons:

It instills confidence in Government’s long – term infrastructure roll out, providing energy access, contributing to economic, community and sustainable development.

Within five years, the REIPPP has attracted R 194 billion of investment and is fast becoming a global model and blue print for other countries, providing policy certainty and transparency. Much of the investment of the REIPPP has been financed through our local banks and development finance institutions.

The Bokpoort project is the first major investment by a Saudi company, ACWA Power.

The project has a broad based consortium led by ACWA Power, the PIC, Lereko Solafrica Investment, Lereko Metier Solafrica Fund 1, Lereko Metier Sustainable Capital Fund, Kurisani Solafrica Investments and Solafrica Community Investment.

The project is based on state-of-the-art Parabolic Trough technology and has a net capacity of 50 MW with a thermal energy storage system (TES). The TES will have storage capacity of 9 hours. This is the longest period of storage of electricity produced by any solar plant of its size and allows plant to dispatch renewable energy generated during the day and night.

This project has a major socio – economic development impact for the Northern Cape and South Africa. Through the bid window process the overall prices of energy have become very competitive.

The design of the REIPPP is intended to leverage the investment in the energy sector to contribute to industrialization of the local economy.

Throughout the construction, the Bokpoort project has spent over R 2,4 bn on local content. 40 percent of the Bokpoort power plant was sourced and manufactured locally. These included:

  • Manufacturing and assembly of solar field collector steel structures.
  • Manufacturing, site erection, installation and testing of a relevant number of water storage reservoirs and tanks for molten salts.
  • Supply of piping and cables.
  • Site preparatory works such as earth moving; foundation work such as piling and all ancillary civil works.
  • Mechanical and electrical erection and assembly of turbine, heat exchangers, transformer, pumps, as well as piping and cables installation.

During construction peak time more than 1200 people worked on site. 70 permanent jobs have been created to operate and maintain the plant. This greenfield project was constructed in 30 months. South Africa has the capacity and capability to build and deliver large scale projects.

The operation of the plant will provide electricity to the Eskom grid to power communities and industry by ensuring a reliable source of renewable energy and increasing the power supply to this vital portion of the Eskom grid, thereby facilitating the development and expansion of commercial and industrial businesses.

In the first bid window the minimum threshold for local content was 25% and in the fourth bidding round government specified that at least 40% percent of project spend should be from local suppliers with a target of 65%. Through the REIPPP we are now beginning to see the formation of
value chains and clustering. 12 new industrial facilities have established which are capable of supplying utility scale projects components.

Minister Arabiah and I have discussed during our meetings in the JEC to increase our trade, investment and economic relations. This investment by ACWA Power is indeed a great project showcasing the capability of a Saudi company.

We congratulate the Chairman of ACWA Power, Mr. Mohamed Abunayyan, for the vision, foresight and confidence in investing in South Africa as an attractive investment destination. We can proudly say that what we are witnessing today is infrastructure roll out.

ACWA Power is aiming to expand its Southern African portfolio to 5000 MW by 2025. The group has identified South Africa, Namibia, Mozambique and Botswana as key growth markets in the region. The company is currently pursuing an active regional pipeline of 1000 MW, representing a combined investment value of approximately R 60 bn. We also look forward to ACWA Power’s launch of the 100 MW Redstone Concentrated Power project, also here in the Northern Cape as well as the development of a 450 MW coal fired plant.

In additional to the renewable energy sector, the gas sector also has potential to provide significant investment opportunities in future. ACWA has shown that by using a first mover advantage, significant opportunities can be unlocked.

South Africa is becoming a frontier for new sectors of fdi such as the green economy, oil and gas, shipbuilding, the ocean economy, rail amongst others. Our government is committed to infrastructure development and will spend R 870 bn over the next three years. South Africa offers many opportunities not only for access to a growing domestic market but also as a platform to the dynamically growing markets of the African continent. To our visitors from Saudi Arabia, South Africa is indeed open for business; Investors enjoy robust protection in South Africa, comparable to the highest international standard and the OECD rates South Africa as among the least restrictive jurisdictions for investment.

I look forward to engaging you during the JEC and encourage you to contact the dti team to advise you of such opportunities.

Thank You

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