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R4bn Tronox solar generation deal sets the bar for private energy generation in SA

R4bn Tronox solar generation deal sets the bar for private energy generation in SA
11-10-22 / Tommy Jackson

R4bn Tronox solar generation deal sets the bar for private energy generation in SA

Johannesburg - Nedbank has today announced that the recent successful conclusion of an investment transaction by world-leading titanium dioxide pigment producer Tronox Mineral Sands will see the construction of two 100 MW solar power plants in the Ditsobotla Local Municipality in the North West.

The plants, which comprise a total of 387 000 solar panels mounted on sun trackers, will supply electricity to five Tronox facilities in the Western Cape and KwaZulu-Natal via wheeling arrangements with Eskom, it said.

"Nedbank Corporate and Investment Banking (CIB) acted as joint mandated lead arranger of the deal, and contributed R827 million of the R3,1 billion debt portion of the total funding. As the first utility-scale renewable-energy captive power project in South Africa, the Tronox deal is a significant step forward for private-sector energy generation in the country.

"Not only is it 100% South African-owned, financed, built and managed, but it is also one of the first wheeling private off-take projects of this scale in the country, and the plants will be among the first of their kind to feed directly into Eskom’s high-voltage transmission network."

Tronox is a world leader in the mining, production and marketing of inorganic minerals and chemicals, most notably the titanium dioxide pigment, which is used in coatings and plastics. Tronox’s operations are very energy-intensive, but the company has firm sustainability commitments.

"Tronox will be the sole energy off-taker from the project, and the two plants are projected to deliver up to 40% of the company’s South African power requirements. As such, this renewable-energy project will not only underpin the security and affordability of its electricity supply, but also reduce its global carbon emissions by an estimated 13% when compared with its 2019 emissions baseline.

"As a market leader in the delivery of innovative renewable-energy solutions and a preferred energy solutions funding and advisory partner to many leading South African organisations, Nedbank CIB is pleased to have been part of this pioneering deal. The project sets an example of what can be achieved, through effective partnerships, in terms of unlocking the value of embedded generation, not only for the businesses that invest in it, but also for the country and its energy transition ambitions," concluded Nedbank.

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