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Financial close reached on two of the three Koruson 1 projects. Investec acted as joint mandated lead arranger and sole hedge coordinating bank for interest rate and foreign exchange risk mitigation
Two of the three Koruson 1 projects have reached Financial Close, with the third project expected to reach Financial Close in early 2023. The San Kraal and Phezukomoya wind energy projects, each with an installed capacity of 140MW, are located in the Umsombomvu Local Municipality on the boundary of the Eastern Cape and Northern Cape Provinces.
The projects, developed by a highly skilled consortium led by EDF Renewables (South Africa), together with its local BEE partners, H1 Holdings, GIBB-Crede and a local community trust, were awarded preferred bidder status in October 2021, under Round 5 of the Renewable Energy Independent Power Producer Procurement Programme.
The projects will sell power to Eskom under a 20-year Power Purchase Agreement. In addition, the Koruson Main Transmission Substation will be constructed on behalf of Eskom and transferred to Eskom on completion.
The two projects are expected to be commissioned from late-2024 and will contribute to the electricity needs of over 280,000 South Africans. During the two-year construction period, the two projects will provide in excess of 250 permanent jobs to South African citizens, with at least a further 20 permanent jobs during the 20-year operating period.
Approximately 40% of the project value will comprise local content, and during operations, 1.2% of revenue generated by the projects will be applied to socio-economic development initiatives for nearby local communities.
Treasury Sales and Structuring (TSS) executed the full foreign exchange rate hedging and acted as sole hedge coordinating bank for the interest rate hedges. In addition, Fund Finance and Coverage issued Letters of Credit in support of the BEE partners’ equity contribution.
About EDF Renewables
EDF Renewables (South Africa), the lead sponsor in the transactions, is a locally based, fully integrated independent power producer that develops, finances, builds, owns and operates commercial renewable energy generation facilities, including wind, solar PV, battery storage and hybrid solutions.
EDF Renewables (South Africa) is a subsidiary of EDF Renouvelables, the renewable energy arm of the global utility EDF, which is majority owned by the French government.
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