Profitable business makes your profit
The ambitious 153 MW/ 612 MWh Red Sands battery energy storage system (BESS) project, poised to become Africa’s largest standalone facility of its kind, has reached financial close, securing R5.4-billion in debt financing from Absa and Standard Bank. This pivotal development marks a significant step forward in bolstering South Africa’s energy security and grid stability.
Located near Upington in the Northern Cape, the Red Sands project was a preferred bidder in 2024’s inaugural BESS public procurement bidding round. It is being spearheaded by Globeleq in partnership with African Rainbow Energy, underscoring a collaborative effort in advancing renewable energy infrastructure.
Formal agreements, essential for the project’s progression, were signed with the Department of Electricity and Energy and the National Transmission Company South Africa (NTCSA) on June 27, with financial close officially achieved on July 1.
The project, originally developed by African Green Ventures and subsequently acquired by Globeleq in 2023, will span approximately five hectares. Upon completion, it will supply electricity to the NTCSA under a 15-year power purchase agreement, providing crucial ancillary services and contributing to significant upgrades in South Africa’s grid infrastructure.
China Energy Engineering Corporation has been appointed as the engineering and procurement contractor, with Sungrow, a global leader in inverter and BESS solutions, providing the BESS technology and a long-term service agreement.
Beyond its energy contributions, the Red Sands project is anticipated to be a catalyst for job creation, forecasting approximately 250 employment opportunities during the construction phase and 80 permanent positions during operations. Globeleq South Africa Management Services will oversee the project’s management from construction through to operation.
Jonathan Hoffman, CEO of Globeleq, hailed the financial close as a “pivotal step in delivering Africa’s largest standalone battery storage project.” Echoing this sentiment, Brian Dames, CEO of African Rainbow Energy, emphasized that the project brings the company closer to its objective of delivering affordable electricity through modern and renewable technologies.
The Red Sands project contributes significantly to South Africa’s broader BESS strategy. To date, the country has successfully procured a total of 1,744 MW/ 6,979 MWh of BESS capacity across three public procurement bid windows, aligning with the 2019 edition of the Integrated Resource Plan to diversify and strengthen its energy mix.