The African Development Bank plans to provide loans for 200MW/800MWh energy storage projects in South Africa

　　The African Development Bank plans to provide US$57.67 million in loans to South African utility company Eskom for the development and deployment of multiple battery energy storage projects.

　　The bank’s board of directors recently stated that the loan has been approved to assist in the development and deployment of a 4-hour battery energy storage system (800MWh) with a total installed capacity of 200MW in seven locations in South Africa. These battery energy storage systems will be deployed in the Western Cape, Northern Cape, Eastern Cape and KwaZulu-Natal provinces of South Africa.

　　Earlier this year, two units of a coal-fired power plant operated by Eskom Medupi were severely damaged by an explosion, which exacerbated the energy shortage faced by the company.

　　The African Development Bank's financing will come from a $5.4 billion concessional loan called the "Clean Technology Fund", which is part of its climate investment fund. These battery energy storage systems will also receive funding from the World Bank and the New Development Bank.

　　The African Development Bank stated that the battery energy storage system will help increase the available share of renewable energy generation in the region, especially the storage and dispatch of excess electricity from renewable energy sources, which will reduce dependence on fossil fuels during peak power demand.

　　Dr. Daniel Schroth, Acting Director of the Renewable Energy and Energy Efficiency Department of the African Development Bank, said: "The approval of the Climate Technology Fund reflects the African Development Bank’s firm commitment to support South Africa’s just energy transition plan and prioritize investment in new low-carbon power generation and New technologies such as battery energy storage systems are now at a critical moment, because countries around the world will take action after the COP26 summit."

　　Eskom is a state-owned company in South Africa that provides about 95% of the country's electricity. The company said it expects South Africa to add 30GW of electricity generation by 2031, mainly from solar and wind energy. This will increase the country's share of renewable energy to more than 40%. The company determined that it needs several gigawatts of energy storage systems to integrate these renewable energy generation and stabilize the operation of the power system.

　　The company said that through the recent 2GW dispatchable renewable energy capacity tender, South Africa has taken a step towards solving the power shortage problem. These projects need to provide energy between 5 am and 9:30 pm every day, and the winning bidder will deploy 420MW solar power generation facilities and 1,400MWh battery energy storage system, which is expected to be put into operation next year. Eskom also allows more large commercial and industrial entities to produce electricity on their own, and provides pilots for them to purchase renewable energy power from utility companies.

　　On November 2, South African President Cyril Ramaphosa announced that he would join the partnership with France, Germany, the United Kingdom, the United States and the European Union to ensure South Africa’s transition to a low-carbon economy and climate-resilient society.

　　This will help the country realize its Nationally Determined Contribution (NDC) plan submitted before the COP26 United Nations climate negotiations and is committed to reducing carbon emissions. And reaching this partnership will raise 8.5 billion US dollars in three to five years, and obtain preferential financing and other tools to support the implementation of the plan.

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