Diversified miner Anglo American has announced that its jointly owned renewable energy venture with global developer EDF Renewables, Envusa Energy, has completed project financing for its first three wind and solar projects in South Africa.

The terms and structure of this non-recourse project financing are typical of high-quality renewable energy infrastructure assets, the London- and Johannesburg-listed company said in a press statement on February 29.

The three renewable energy projects, known as the Koruson 2 cluster of projects, are located on the border of the Northern and Eastern Cape provinces of South Africa, will have a total capacity of 520 MW of wind and solar electricity generation.

“The successful project financing of these initial projects marks our first major step towards addressing Anglo American’s largest remaining source of Scope 2 emissions – our electricity supply in Southern Africa,” said Themba Mkhwanazi, Anglo American’s regional director for Africa and Australia.

“As we make progress towards our 2040 carbon neutral operations commitment, we also see the opportunity to enhance energy reliability and grid resilience in South Africa. We expect that energy availability to help catalyse extensive socio-economic activity, playing a critical role in unlocking South Africa’s economic development and growth prospects,” he added.

The projects, forming part of Envusa Energy’s mature pipeline of wind and solar projects in South Africa, comprise two wind generation plants with a capacity of 140 MW each, and a 240-MW solar plant.

According to the statement, Envusa plans to develop an energy ecosystem to supply a mix of renewable energy, generated both on Anglo American’s sites in the Southern African region, and other sites from which renewable energy will be transmitted via the national grid. This configuration, the company says, promises considerable electricity cost savings compared to existing tariffs of the state-owned power utility Eskom.

Anglo American’s three businesses in South Africa (Anglo American Platinum, Kumba Iron Ore, and De Beers), have already committed to 20-year offtake agreements with Envusa. All projects are to reach commercial operation during 2026. This inaugural phase of contracts is expected to abate about 2.2 million tonnes of carbon dioxide (CO2) a year.

“Achieving financial closure for these three high-quality renewable energy projects marks a crucial milestone in support of Anglo American's global decarbonisation journey and bolsters South Africa's pursuit of a resilient and clean energy future,” said Nolitha Fakude, chair of Anglo American's management board in South Africa and chair of Envusa Energy.

According to Tristan de Drouas, CEO at EDF Renewables in South Africa, the financial close of this initial cluster of projects is the first step towards Envusa’s ambition to roll out 3 to 5 GW of wind, solar and storage projects by 2030.

“These collective initiatives align seamlessly with EDF Group's CAP 2030 strategy. This strategy is ambitiously focused on doubling our net renewable installed energy capacity globally, including hydropower, from 28 GW in 2015 to 60 GW by 2030,” he noted.

In line with both companies’ commitment to supporting a just energy transition, Envusa is exploring a range of black economic empowerment (BEE) and community partnership models that will enable businesses and host communities to share in the benefits created by the development of the renewable energy ecosystem, along its value chain.

According to the statement, the first of these initiatives includes the incorporation of a 20% equity investment by Pele Green Energy, an established South African independent power producer (IPP) into each of the three project companies delivering the development of the Koruson 2 assets.

“Envusa Energy is also in the process of implementing the incorporation of a BEE partner at the business level to further demonstrate our commitment to supporting black economic empowerment,” said the press statement.

“The development of the renewable energy ecosystem presents an opportunity to help build a more collaborative and inclusive economy that places people and the principle of shared prosperity at the heart of development.”