The bank approved the loan, which includes a $41.5m concessional financing from the Clean Technology Fund (CTF), for the XiNa Solar One project in the Northern Cape Province.

AfDB and other financial institutions including three commercial banks in South Africa will finance the senior debt.

The plant will generate the electricity by using parabolic trough technology and a superheated steam cycle that has a 1,650MWh of storage capacity.

The project, which is expected to cost $908m, will be interconnected through the special purpose vehicle by a 3km transmission line to an adjacent substation.

AfDB said the project supports the South Africa Government’s energy strategy that plans to diversify the energy sources as specified in the National Integrated Resource Plan (2010 – 2030).

It will support the country’s target to reduce its dependence on coal fired power plants, increase access to clean power, and decrease the peak power generation costs.

The bank said the project is aligned with its Country Strategy Paper for South Africa which intends to support the country’s infrastructure development in clean energy.