BioPower And POWGEX ENERGY Secure Order For 30 GW Solar Power Project In South Africa

BioPower Operations Corporation, operating as HYFI Corp., has announced a significant milestone for its joint venture with POWGEX ENERGY SOUTH AFRICA, POWGEX-HYFI. The joint venture has secured its first order for green electricity generating facilities, with a potential capacity of up to 30 Gigawatts (GW) of solar power. The initial phase will involve the construction, ownership, and operation of a 1 GW facility in the populous Municipalities of Mpumalanga, South Africa, with the possibility of expanding to 30 GW.

Project installations for the first 1 GW are anticipated to commence in Q1 2024, with an estimated total project cost of $2.5 billion. The primary costs will be attributed to solar photovoltaic panels, battery storage, engineering, procurement, and construction, and operation and maintenance services. For the initial phase, a leading solar PV and battery storage Original Equipment Manufacturer has been selected to provide and install the deliverables. Discussions are also underway with a renowned EPC and O&M provider for the project’s installation.

Mpumalanga, a prosperous province in South Africa, presents a favorable opportunity for POWGEX-HYFI. This initial order is expected to be the first of several from municipalities aiming to establish long-term Power Purchase Agreements (PPAs) directly with POWGEX-HYFI. The Municipalities in Mpumalanga Province have a diverse economic landscape encompassing manufacturing, mining, construction, finance, and power generation.

POWGEX-HYFI has been invited to deliver an initial 1 GW Solar Power Plant, with potential future expansion ranging from 5 GW to 30 GW within the larger Mpumalanga region. The province currently has a transmission capacity of nearly 22 GW in substation and transformer capacity, but only 6.5 GW of readily available generating capacity. This indicates the possibility of comfortably accommodating additional capacity within the existing infrastructure, potentially reaching up to 30 GW based on Eskom’s Grid Connection Capacity Assessment.

South Africa faces a substantial challenge in renewable power investment, as highlighted in a government-backed report titled “Net zero in South Africa – It all hinges on Renewables” by the South Africa National Business Initiative in September 2022. To fully decarbonize the power sector by 2050, a minimum of 190 GW of renewables needs to be deployed. Moreover, capturing the opportunities presented by the Green Hydrogen economy may require an additional 170-200 GW of dedicated renewable capacity. This implies the need to build approximately 6-7 GW of renewables annually for the next three decades, with the potential for an even higher rate if pursuing the Green H2 opportunity.

BioPower has expanded its consortium of interested banks, investment banks, and funds to provide structured finance for the projects. Discussions with leading financial institutions are progressing to secure the necessary funding for the project requirements. Signet Capital has been appointed as the lead financial advisor and is arranging a $450 million private placement for the initial phase of the green electricity generation project. The joint venture, known as POWGEX-HYFI, aims to construct, own, and operate green electricity-generating facilities for a duration of 45 years.