Chariot Ltd's (AIM:CHAR, OTC:OIGLF) renewables subsidiary Etana Energy has inked a 20-year Power Purchase Agreement (PPA) for 75MW of solar power from the Du Plessis Dam PV2 project, in South Africa, alongside a separate US$75 million financing to the firm’s expansion.
The funding comprises US$55 million in guarantee finance from Standard Bank and up to US$20 million in equity investment from Norfund, Chariot said.
Through the PPA, which has a 20-year lifespan, Etana will be able to sell 75MW of the Du Plessis Dam project’s expected capacity of 105MW.
Today’s news helps advance the project, where construction is slated to start in the second quarter.
"Construction starting on the Du Plessis 75MW solar project marks a key milestone for Etana, our joint venture energy trading business, which will start generating meaningful revenues once this project is in production,” chief executive Adonis Pouroulis said.
“This is the first solar generation project within Etana's initial offtake portfolio with others progressing to financial close.
“There has been oversubscribed demand from industrial and commercial customers looking for long term, sustainable supply and we believe we have a very scalable business that is at the forefront of helping to resolve the energy situation in South Africa.”
Pouroulis added: “[The financing] provides balance sheet support, combined with an equity investment which will unlock further generation projects, fund rapid, scalable growth and lead to material revenues from both Etana and potential future direct participation in generation projects.
“This clearly endorses the value that we see within the electricity trading platform which is looking to provide much needed long term, cleaner and competitive energy across South Africa."
Chariot owns a 49% interest in Etana, alongside partner H1 Holdings which has 51%.