ENGIE Africa will also acquire 46% of Abengoa's O&M company that operates the facility
Spanish energy firm Abengoa has signed an agreement with electric utility company ENGIE to divest its 40% participation interest in the 100MW solar thermal plant in South Africa.
Under the terms of the agreement, ENGIE Africa will also acquire 46% of Abengoa’s O&M company that currently carries out the operation and maintenance of the Xina Solar One facility.
Upon closing of the transaction, Abengoa is expected to remain as a shareholder of the O&M company with a 46% stake.
Abengoa said that the transaction is part of its asset divestment plan, focused on the development of engineering, procurement and construction (EPC) projects.
The company intends to use the net proceeds from the transaction to repay the financial debt, as per its deleveraging objectives.
For ENGIE, the stake purchase is part of its low-carbon strategy and contributes to its geographic expansion in South Africa. The company already owns 1,220MW of installed capacity in the country.
Xina Solar One leverages parabolic trough technology to generate renewable, sustainable and dispatchable power from the sun.
The project will be owned by ENGIE, Industrial Development Corporation (IDC), Public Investment Corporation (PIC) and Xina Community Trust.
Xina Solar One marks the third facility built by Abengoa in South Africa, following 100MW Kaxu and 50MW Khi Solar One projects.
The power plant features a thermal energy storage system that leverages molten salts to store the required energy for a further five and half hours supply, to meet the peak demand.
Furthermore, Xina Solar One plant is said to supply more than 95,000 South African households with clean energy, eliminating 348,000 tonnes of CO2 emissions per annum.
Abengoa is a major player the solar thermal power space, with a total capacity of 1.9GW in four continents.
In November last year, the company secured a contract from vanadium energy storage solutions provider Bushveld Energy to build a hybrid microgrid power plant in South Africa.