The U.S. Overseas Private Investment Corp. has agreed to provide as much as $400 million in aid for a $700-million, 100-mw solar thermal power project in South Africa.

OPIC’s board on Sept. 17 approved an “investment guarantee” for the project, which is being developed by SolarReserve, Santa Monica, Calif.; Riyadh-based Arabian Company for Water and Power (ACWA Power), major South African institutions, local black-owned enterprises and the South African Community Trust.

The Redstone project, at Postmasburg in South Africa’s Northern Cape province, was selected in the third round of concentrated solar power (CSP) projects under South Africa’s Renewable Energy Independent Power Producer Procurement Program.

Besides OPIC—a U.S. government development-finance organization—seven other entities are providing loans for the project, including South African and international commercial lenders. The International Finance Corp. is the lead lender.

The project is located next to the 75-mw Lesedi and 96-mw Jasper photovoltaic solar power projects. The three will comprise a 271-MW solar park to generate electricity.

Mary Grikas, SolarReserve vice president of communications, said via email that the financial close for the Redsan project is expected by the end of December, with construction to follow. She said that officials expect the project to begin operations by 2018.

The project will use SolarReserve’s CSP tower technology with integral molten-salt thermal energy storage. The storage has 12 hours of load energy, or an equivalent of 1,200 mwh of power, without fuel backup.

The project also features dry cooling of the power generation cycle as an important element to minimize water use, according to OPIC.
 
SolarReserve's Grikas said that a significant portion of the project’s procurement and workforce will come from South Africa.

She said that South African suppliers will account for more than 40% of the project’s cost. Some of that will support the South African government’s Broad-Based Black Economic Empowerment activities.

That program includes initiatives such as skills development, employment equity, socio-economic development, preferential procurement and enterprise development, especially for small and medium-sized enterprises.

Grikas said OPIC estimates that the project will create more than 4,000 jobs in the construction phase, including craft workers, and jobs in equipment supply, manufacturing, engineering and transportation.

OPIC on Sept. 17 also approved $250 million for the Standard Bank of South Africa to finance power generation and infrastructure projects in Sub-Saharan Africa..

That assistance aims to help implement President Obama’s PowerAfrica initiative, announced on June 30, 2013, which has a goal of doubling the access to electric power in the sub-Saharan region, according to the White House