Globeleq closes $300 million financing for landmark project

Globeleq, an independent power company, and its partner African Rainbow Energy, have completed financing for a major battery energy storage project called Red Sands, with a capacity of 153 MW/612 MWh in South Africa.

Structuring financing for South African energy

This project, which represents Africa’s largest standalone battery storage to reach financial close, mobilises approximately ZAR 5.4 billion ($300 million) in debt financing, subscribed by Absa and Standard Bank. China Energy Engineering Corporation has been selected as the lead engineering and procurement contractor for the site.

The battery storage technology and associated long-term services will be provided by Sungrow, a company specialising in energy storage systems and inverter solutions. Located near Upington, in the Northern Cape Province, the Red Sands facility will cover an area of approximately five hectares.

Public sector involvement in the project

A 15-year Power Purchase Agreement (PPA) was signed with the National Transmission Company South Africa (NTCSA), a subsidiary of Eskom responsible for electricity transmission. This agreement follows recent finalisation of accords with the Department of Electricity and Energy and NTCSA, formalised by the South African Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa.

The project includes significant upgrades to existing national electrical grid infrastructure aimed at reducing transmission and distribution line congestion in the region. Construction is expected to create approximately 250 jobs, supplemented by 80 permanent operational positions, predominantly sourcing local labour.

Project management and development by Globeleq

The initial development was undertaken by African Green Ventures and subsequently acquired by Globeleq in 2023. Globeleq will oversee operations during construction and operational phases through its subsidiary, Globeleq South Africa Management Services.

The Red Sands project adds to Globeleq’s diversified portfolio, which already comprises 13 solar photovoltaic, wind, and hybrid PV plus battery storage plants in South Africa, Mozambique, Kenya, and Egypt, as well as the Menengai Geothermal plant currently under construction in Kenya.

Jonathan Hoffman, CEO of Globeleq, stated: “This critical milestone in the Red Sands project represents a significant advancement in strengthening Africa’s electricity grid resilience by leveraging proven battery storage technologies and benefiting from the support of solid financial and institutional partners.”