South Africa's hopes for a raft of new power projects to help it out of a crippling energy crisis are fading, with investment still elusive as an already extended funding deadline looms, government officials, companies and bankers have told Reuters.
Africa's most developed economy is facing daily power cuts due to regular breakdowns at state power utility Eskom's ageing coal-fired plants, and needs an extra 4-6 gigawatts of generating capacity, officials say, to end rolling blackouts.
Following the COVID-19 pandemic, the projects, a mix of solar, wind, battery storage and natural gas, have faced rising interest rates and higher costs for everything from solar panels and wind turbines to labour."When they were bid, I do think were feasible," said Sherrill Byrne, a banker at Standard Bank who has worked with some of the companies. "But the market moved against them, and now they are struggling.
Neither Acwa Power, which is building one 150 MW plant, nor Mulilo, which is meant to build two projects, responded to emailed questions. Mohamed Hoosen, Engie's managing director for renewables in Asia, Middle East and Africa, said it plans to reach financial close on its 128 MW Oya Energy project by early December and launch it by October 2025.
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