South Africa’s biggest pension fund has paid 22 billion rand ($1.8 billion) for stakes in two solar power stations expected to add 200 megawatts of power to the national grid, it said on Wednesday.
The state-owned Public Investment Corporation (PIC) said it has taken 20 per cent stakes Ilanga and Xina power stations in the Northern Cape province.
The PIC, which buys bonds in renewable energy projects, said it will also lend 600 million rand to the Ilanga project.
State-owned power utility Eskom which provides virtually all of South Africa’s power, is facing a funding crunch as it races to bring new power plants online to stave off electricity shortages in Africa’s most advanced economy.
The chronic energy shortages are pushing the government to seek alternative sources of electricity from Eskom’s fleet of coal-powered stations that take much longer to build.
With year-round sunshine and miles of windswept coast in South Africa, investors are warming to the renewable energy potential, to ease the regular blackouts that are strangling industries from mining to manufacturing.