Project Summary for Public Disclosure
(after approval of NDB financing)
Project Name Battery Energy Storage Project
Country The Republic of South Africa
Type Sovereign
Area of Operation Clean Energy & Energy Efficiency
Concept Approval Date 26 August 2019
Financing Approval Date 16 December 2019
Total Project Cost USD 1,200 million
Initial Limit of NDB Financing ZAR 6,000 million
Current Limit of NDB Financing ZAR 6,000 million
Borrower Eskom Holdings SOC, Ltd
Project Entity Eskom Holdings SOC, Ltd
Project Context South Africa is transitioning toward a low carbon economy. The
government has adopted the Integrated Resource Plan 2019
(IRP) and intends to add more than 20,000 MW of wind and
solar energy generation capacity, with their share in the
country’s energy mix growing from the current 3% to 24% by
2030. Up to now, many renewable energy generators have
been integrated into the power grid. However, as
uncontrollable supply resources, the high output hours from
wind and solar power do not coincide with the time of peak
electricity consumption in a day, resulting in excess electricity
during low demand hours and curtailment of production from
renewable energy. This presents a challenge for effective
utilization of the growing renewable generation capacity in
South Africa’s power sector. At the same time, South Africa is
facing power shortages due to aging generating assets and
delayed completion of new generation facilities. To meet the
electricity demand, Eskom has to run diesel-based power
plants during peak hours and implements load shedding to
prevent failure of power grid. Therefore, meeting electricity
peak demand is another immediate challenge for the country.
Project Description The components of the Project include 1,440 MWh of
distributed battery storage, 60 MW of solar photovoltaic
generation facility, and application software to optimize the
performance of distributed battery storage. The Project will be
implemented at approximately 17 sites, located within or
adjacent to existing distribution substations of Eskom, across
four provinces of South Africa.
Project Objective The Battery Energy Storage Project (Project) provides a
solution to address both challenges. The Project can store
excess renewable energy in low demand periods and release
the energy during peak hours, meeting the demand with
energy from renewable resources and minimizing the use of
fossil-fuel based generation. The Project will also reduce the
power load on transmission network and therefore defer the
investment needs for network augmentation. Besides, the
Project can provide frequency support to the power grid.
The benefits of the Project include:
1. increased electricity supply of 525 GWh during peak demand
hours, and
2. avoided CO2 emission of 90,000 tons every year.
Implementation Arrangements The Project is planned to be implemented over 3 years by
Eskom.
Environmental The Project has been assigned category “B” in accordance with
and Social Information NDB’s Environmental and Social Framework (ESF). E&S impacts
of the Project include potential leakage of battery electrolyte
and soil contamination, potential pollution from waste battery
disposal, loss of habitats and potential impacts to protected
species at some sites. E&S risks and impacts will be mitigated
by adherence to country system requirements.
Financing The total cost of the Project is estimated to be up to USD 1,200
million with contingencies and financing costs, etc. NDB will
finance ZAR 6,000 million, accounting for about 33% of the
total cost. The remaining balance will be financed by the World
Bank, African Development Bank and Eskom.
Source of Fund Amount (USD million)
NDB Up to 400
Other Financiers and Eskom 800
Contacts NDB Borrower and Project Entity
Public Sector Eskom Holdings SOC, Ltd Priscilla Jezi
Department
[email protected] Yang Luo
