- The World Bank Group has approved a $497 million concessional loan to help South Africa repurpose its coal fired power plant
- The project site will be repurposed with 150 MW solar PV, 70 MW wind and 150 MW battery storage
- It is aimed to be a demonstration project and serve as a reference to transition fossil-fuel projects in South Africa and elsewhere
South Africa has secured $497 million financing from the World Bank Group to decommission and repurpose its Komati Coal-Fired Power Plant with 150 MW solar PV, 70 MW wind energy and 150 MW battery energy storage system (BESS) capacity as a demonstration project for the energy transition.
While the project will help to improve the quality of electricity supply, ensure grid stability and enhance energy security in the country, it is aimed to serve as a reference on how to transition fossil-fuel assets for future projects in South Africa and around the world.
Through a cycle of piloting, monitoring, assessing, documenting and information sharing, the Komati project is expected to be a learning experience.
“This project is critical to our understanding of the sustainability of decommissioning, repurposing, and mitigating the socio-economic impacts for workers and communities before we scale up the move of the power sector into a low-carbon path,” said South Africa Minister of Public Enterprises, Pravin Gordhan.
South Africa’s ailing and aging power infrastructure is a major contributor to its carbon emissions, accounting for 41% of the same, thanks mainly to the national utility Eskom’s 15 coal power plants with an average age of 41 years, providing 38.7 GW of the country’s 52.5 GW installed capacity.
Under the country’s Integrated Resource Plan 2019, South Africa plans to retire 12 GW of its old and inefficient power fleet by 2030 and scale up private sector-led renewables of 18 GW during the same period, added the minister.
The World Bank financing comprises $47.5 million concessional loan from the Canadian Clean Energy and Forest Climate Facility (CCEFCF) and a $10 million grant from the Energy Sector Management Assistance Program (ESMAP).
According to Eskom, the last operating unit of Komati with 121 MW capacity was shut down and ceased operations at the end of October 2022. The concessional loan from the bank will be used to decommission the Komati Power Station, repurpose and repower it, and for other Just Energy Transition elements including training Eskom employees. The utility will collaborate with the South African Renewable Energy Technology Centre (SARETEC) to develop renewable energy artisan skills.
“This is a significant development for South Africa’s Just Energy Transition to renewable energy as it brings the much-needed funding to enable Eskom to train its employees and members of the host communities to empower them to continue playing a central role in the provision of clean energy for the country,” added Chairman of the Eskom Board, Mpho Makwana.
In October 2022, Eskom entered land lease agreements with independent power producers for 2 GW new renewable energy capacity around its existing power stations (see 2 GW Renewable Capacity Moves Forward In South Africa).