PIC set to ‘participate directly’ in renewable energy projects
THE Public Investment Corporation (PIC) intends to participate directly in future renewable energy projects in South Africa in order to support black economic empowerment, Roy Rajdhar, general manager for the PIC’s Isibaya Fund, said on Wednesday.
Mr Rajdhar was speaking at an announcement in Johannesburg that solar energy company SunEdison had raised R2.6bn for its two solar projects in Limpopo. SunEdison is developing the projects — which have a capacity of 30MW and 28MW — with Chinese company Chint Solar, the PIC and the Kurisani Youth Development Trust.
Last year, the Department of Energy selected Witkop Solar Park in Polokwane and the Soutpan Solar Park in Blouberg in the first window of its independent power producer procurement programme. The two projects are due for commissioning in 2014.
PIC has a 39% interest in the two projects, while the joint venture between SunEdison and Chint owns 51% of the project. Kurisani has 10% equity.
PIC fund principal of environmental infrastructure, Memory Mashingaidze, said on Wednesday: "We are participating in round one and we are looking to participate in rounds two and three as well. We want to support the programme as a long-term player in the rounds that are anticipated."
Mr Rajdhar said the PIC had set aside R12bn for environmentally sustainable investments. Most of that would go towards renewable energy projects, he said. To date, PIC had committed half of the allocation, he said.
The allocation included the R5bn Industrial Development Corporation "green bond", which had been established to facilitate funding for businesses looking to invest in clean-energy infrastructure development, he said.
Further, the PIC would increasingly look at direct investment in future renewable energy projects, he said.
He said the PIC allocation for renewable energy was not cast in stone and could increase in future.
SunEdison vice-president Pashupathy Shankar Gopalan said on Wednesday construction of the projects would start in January.
Like most developers of local renewable energy projects, SunEdison had alluded to the possibility of setting up local manufacturing capacity.
The Department of Energy’s local content requirements for the projects is 45%.
Under local content requirements, developers of renewable energy projects, which are part of the renewable energy procurement programme, must use a certain proportion of locally made components.