Mainstream looks to have €420m project finished by 2017
Published 09/06/2015 | 02:30
Irish renewable energy company Mainstream Renewable Power expects construction to be completed on two large scale wind farms in South Africa by the end of 2017.
The wind farms, which will have a with a total generation capacity of 250 megawatts, represent an investment of about €420m.
The contract was awarded under the fourth round of the South African government's renewable energy procurement programme. Under the terms of the deal, the Mainstream-led consortium will build the 140MW Kangnas Wind Farm located in the Nama Khoi Municipality in the Northern Cape.
It will also build the 110MW Perdekraal East Wind Farm located in the Cape Winelands District and Witzenberg Local Municipalities of the Western Cape.
Speaking to the Irish Independent, Mainstream CEO Eddie O'Connor said that he expects that both farms will be constructed by 2017.
"We have been made the preferred bidder on the project so we just have to sit down with the grid company and the department of energy to get the project to a financial close," he said. "I think that financial close will be reached in the first quarter of next year and about a year after that construction should be completed."
The project will be developed through Mainstream's joint investment platform Lakela Power. The $1.9bn investment vehicle, established earlier this year, is aiming to develop between 700 and 900MW of projects across Africa by 2018. It is a joint venture with UK-listed private equity group Actis, who have a 60pc stake.
When asked how the project would be funded Mr O'Connor said that it would be through a 25-75 equity-debt split. "We will have to find about €40m to meet our equity component for the project," Mr O'Connor said. "We are successfully oversubscribed for that now. For the debt we will have loads of lenders, once you have a contract with the government it is very easy to find willing lenders."
Mainstream has been awarded a total of 848MW of wind and solar projects under the South African government's renewable energy procurement programme since the first award in 2011.
In addition to these projects, the Dublin-based renewable energy developer is also currently constructing three wind farms in South Africa's Northern Cape, totalling 360MW, which it was awarded under round three of the programme.