The board of directors of the Overseas Private Investment Corp. (OPIC), the U.S. government's development finance institution, has approved up to $250 million for the agency's first solar power project in South Africa.
The 60 MW plant is expected to help diversify the country's electricity generation beyond its heavy coal concentration. The project came about in response to the new Renewable Energy Independent Power Producer Program (REIPP), a South African government initiative that aims to increase investment in renewable energy production.
By involving two local firms as co-sponsors along with its U.S. investors, the project will also help South Africa meet the Black Economic Empowerment objectives of the program.
The OPIC financing will enable two U.S. companies, MEMC Electronic Materials and its subsidiary SunEdison, to construct and operate a solar photovoltaic plant in Boshoff in South Africa's Free State province. All electricity generated by the plant will be sold to the national grid through a power purchase agreement.