South African Private Wind Farm Achieves Financial Close

The 89MW wind farm will supply Sibanye-Stillwater’s mining operations.

By Liz Bains on
31st May 2023

A consortium of African Infrastructure Investment Managers (AIIM) and Reatile Renewables has reached financial close on an 89MW private wind farm project in South Africa. 

The wind farm will supply Sibanye-Stillwater’s South African mining operations via a wheeling agreement with the state-owned utility provider Eskom. The mining company has signed a 15-year power purchase agreement (PPA) for the output as part of its plans to decarbonise its business by 2040.

Construction of the Castle Wind Farm, located near the town of De Aar in the Northern Cape province, will begin in June. Commercial operation is slated for early 2025.

Rand Merchant Bank was the sole mandated lead arranger for the project.

Sechaba Selemela, investment principal at AIIM, noted that the transaction was another step towards solving South Africa’s energy crisis.

Neal Froneman, CEO of Sibanye-Stillwater said, “This marks our first major step in delivering over 550MW of our renewable project portfolio and is a significant milestone in our journey to carbon neutrality by 2040. The project will not only play a pivotal role in reducing carbon emissions and mitigating climate change but also results in cost savings on electricity and provides energy security benefits for Sibanye-Stillwater's South African operations.”

This is the second private wind power wheeling project in South Africa to have reached financial close. The 69MW Msenge Emoyeni wind farm achieved financial close in March this year and is also being developed by AIIM and Reatile Renewables. The PPA agreement was signed with South African energy giant Sasol. 

AIIM develops and manages private equity infrastructure funds. The firm says it has been a strong proponent of increasing the ability of South African pension funds to invest in unlisted infrastructure investments. 

Such assets provide an attractive option for pension funds to meet their investment return aspirations, while also helping to address the country’s huge infrastructure investment needs in power generation and transmission, rail, ports, and the water sector. 

In the power generation sector alone, AIIM says it has identified an equity investment opportunity of more than R100 billion (US$5 billion) in the period to 2030.

Photo: Stillwater mine (Supplied)

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