Zurich-based impact investor responsAbility Investments has committed to provide long-term debt financing for the construction of two solar PV projects in Botswana, through one of its climate funds. The projects are located at Bobonong (3 MW) in the Central District and Shakawe (1 MW) in the North-West District of Botswana.
Both the solar facilities are being developed by Sturdee Energy, an independent power producer (IPP) focused on Sub-Saharan Africa. Sturdee was awarded the tender for construction of these grid-tied solar power plants by the Botswana Power Corporation (BPC). As part of the tender, Sturdee have also committed to using local labor and services in the project execution as well as ongoing operations.
Sturdee will sell the power produced from the solar power plants to the state-owned utility BPC, under a 25 year-long power purchase agreement (PPA) with BPC. The signing of the PPA marked a major milestone in Botswana’s renewable energy commitments, reducing the country’s annual carbon emissions and as well its reliance on fossil fuel-generated electricity.
The solar PV plants are expected to reach commercial operations before the end of this year. The solar assets worth $5 million are being financed on a non-recourse project finance basis via two special purpose vehicles in Botswana.
According to Monya Bassingthwaighte, Principal at responsAbility, the two solar plants will help to avoid 344,255 tons of CO2 emissions. These unique projects have benefited from leading technical, legal, and environmental consultations in order to be developed to global standards.
“We are excited to support Sturdee and BPC to implement these first-of-their-kind projects in Botswana. We hope this first small step will be demonstrative and help pave the road for future projects of this nature in the country,” Bassingthwaighte commented.
Monique Jordaan, Sturdee Energy’s Head of ESG, appreciated responsAbility’s support in realizing these two solar plant projects that are paving the way for the rapid adoption of solar energy in Botswana. According to Jordan, responsAbility’s impact investment approach and understanding of challenges pertaining to financing smaller projects in the continent has been integral to the projects’ success.
The World Bank estimates that Botswana has an electrification access rate of nearly 72%. To enhance electrification across the country, the government has launched a joint 5 GWp solar PV mega project with Namibia in 2019. The initiative is backed by Power Africa, and will sell much of the electricity produced to the neighboring countries in the Southern African region. The third phase of the project will develop solar energy capacity of 1 to 3 GWp.
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