The City of Cape Town is calling private and public sector financiers such as development banks and multi-lateral development funds with proven experience in providing finance for renewable energy projects to submit proposals for low cost finance of renewable energy projects that will be owned and operated by the City. This is a strong step forward in the City’s plans to diversify its energy mix to enhance security of supply and to take strong climate action through the use of cleaner resources.
Over time, the City’s renewable energy programme could reduce Cape Town’s greenhouse gas emissions significantly. The City hopes to have a ground-mounted solar photovoltaic (PV) plant built and operated by the City by approximately 2022/23 if all goes according to plan. This is in addition to its intent to procure some of its energy from independent power producers in future.
“The programme will be made up of a number of projects ranging in size from less than 1MW to 100MW per project and all projects will be located on City-owned land and buildings, typically within the City distribution grid. It will comprise a range of technologies and sizes, including both rooftop and ground-mounted solar PV systems, developed and implemented over a period of 20 years, until 2040. The City is already a leader in its climate actions, in efforts to diversify its energy supply, in energy efficiency and in sound governance and prudent financial management. We look forward to entering into partnerships as we all join the movement for a more sustainable, climate-friendly city,”said the City’s Mayoral Committee Member for Finance and Executive Deputy Mayor, Alderman Ian Neilson.
· The renewable energy provided is expected to be derived predominantly from solar photovoltaics and wind generation systems accompanied by utility scale energy storage, with the opportunity for other renewable or lower carbon energy sources to be included.
· The finance provided must also cover all costs required to connect the projects to the distribution grid.
· The minimum operational life of each project is expected to be 20 years and accordingly the tenure of the funding instrument should be in the region of 15 to 20 years.
· The finance provided should cover all costs of development and construction of each power plant and can be in the form of loans/debt, grants, equity, credit guarantees, or a blend thereof.
· This renewable energy programme has the potential to reduce the City’s greenhouse gas emissions significantly over time. Consideration should therefore be given to accessing concessional climate finance due to the beneficial climate mitigation impacts of the renewable energy programme.
· For larger scale projects, there is the potential to explore projects located within, or in close proximity to, the City’s boundaries, but connected to the Eskom grid.
“The City has always believed that local governments have the constitutional power and obligation to procure renewable energy and this is necessary to move away from the sole reliance on Eskom for energy supply. A stable and cleaner energy supply will also give the economies of Cape Town and other municipalities in the country a boost towards sustained recovery following the impact of the Covid-19 pandemic on the economy,” said the City’s Mayoral Committee Member for Energy and Climate Change, Councillor Phindile Maxiti.