China Silk Road fund buys into $4bn Dubai CSP plant; South Africa’s Eskom shelves 100 MW project

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China Silk Road fund to acquire 24% of giant 700 MW Dubai project

China's Silk Road fund is to acquire 24% of ACWA Power's 700 MW DEWA CSP plant in Dubai, the developer announced July 22.

The Silk Road fund invests in a range of sectors under China's Belt and Road initiative, which expands China's influence over infrastructure, energy resources and industrial cooperation in Asia.

The giant 700 MW DEWA CSP project will require 14.2 Billion AED ($3.9 billion) of investments. The project consists of three 200 MW parabolic trough systems supplied by Spain’s Abengoa and a 100 MW central tower plant supplied by U.S. developer BrightSource. Awarded at a record-low tariff price of $73/MWh, the plant will host up to 15 hours of energy storage capacity.

In April, Saudi Arabia's ACWA Power signed an Engineering, Procurement, and Construction (EPC) contract with Shanghai Electric, a major Chinese power company, to install the project.

“The introduction of [the Silk Road Fund] into the DEWA CSP is absolutely in line with ACWA Power’s established strategy of sharing investments with value adding partners who will in turn bolster our projects," Paddy Padmanathan, Chief Executive Officer of ACWA Power, said in a statement.

ACWA Power will retain a controlling equity interest in the project, Padmanathan said.

Eskom scraps Kiwano CSP plant, favors batteries

South Africa's Eskom has scrapped its 100 MW Kiwano CSP project in the Northern Cape, choosing to instead invest in battery storage, local media reported.

Eskom, the state-owned power utility, had secured international financing for the Kiwano project from the African Development Bank (ADB), the European Investment Bank (EIB), the French development finance institution AFD, the German development bank KfW, the Clean Technology Fund (CTF) and the World Bank.

Eskom has now decided the Kiwano CSP project would be too expensive and the funds will instead be invested into battery storage projects, Eskom spokesperson Khulu Phasiwe told South Africa's Independent newspaper.

"Our funders were happy with that," Phasiwe said.

In April, the South African government finally signed Power Purchase Agreements (PPAs) for 27 renewable energy projects, ending more than two years of delays due to state financing concerns. The agreements included ACWA Power's 100 MW Redstone CSP project, awarded in 2015 at a tariff of $124/MWh for a period of 20 years.

Last month, Saudi Arabia's ACWA Power and the Central Energy Fund of South Africa agreed to co-invest in renewable energy projects in South Africa, starting with the Redstone CSP plant.

Following the agreement, the construction of the Redstone plant will begin this year, ACWA Power said in a statement.

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