• September 29, 2016
    Last updated 6 minutes ago

energy

Saudi’s ACWA confident South Africa deal will go ahead

Solar project delayed after state utility refused to sign agreement

20:19 September 19, 2016

Dubai: Saudi Arabia’s ACWA Power is confident that a deal to build a 100-megawatt solar plant in South Africa’s largest province, the Northern Cape, will go ahead despite delays from the state utility.

South Africa’s government has already approved ACWA and SolarReserve from the United States to develop the Redstone plant, however, state utility Eksom has reportedly refused to sign a $900 million (Dh3.3 billion) power purchasing agreement.

“We are confident that there is no policy change,” ACWA Power chief executive Paddy Padmanathan told reporters at a conference in Dubai on Monday. “I’m expecting [the agreement to finalised in] a matter of weeks, I think, honestly, weeks, I don’t think its months. It’s a matter of weeks.”

The deadline to sign the agreement passed on August 24 with Eksom telling Bloomberg on August 29 that it wanted to “have a discussion” about the agreement first.

“Possibly new people came into different positions and they have decided to take a review. So OK fine they took a pause, there is a lot of excitement,” Padmanathan said.

The cost of the project, which includes a 20-year supply arrangement, has increased to 62 billion rand ($4.3 billion; Dh238.7 billion) from 50 billion rand, Eksom told Bloomberg.

Padmanathan said the delay would have a minimal financial impact on the company.

“We are investing 30, 40 years so for me what happens in three weeks, four weeks is of no relevance,” he said.

The Redstone plant is scheduled to be completed in 2018, according to a January 2015 report from South Africa’s BusinessTech.