TUNIS (Reuters) - The African Development Bank (AfDB) will lend $365 million to South Africa's coal-intensive power utility to boost the share of renewable energy, saving millions of tonnes of CO2 emissions, the bank said on Monday.
The financial package will help electricity utility, Eskom, implement a $1.3 billion project comprising sub-Saharan Africa's first concentrated solar power plant and South Africa's first large-scale wind power plant, the bank added in statement.
"The initiatives are the first of their kind in a region where they are seen as a test case and catalyst for larger-scale delivery of power using renewable technologies to displace considerable future CO2 emissions," said Hela Cheikhrouhou, director of the AfDB's Energy, Environment and Climate Change Department.
Currently, South Africa generates barely 22MW in wind power and has no grid connected solar power generation capacity. In the 2010 financial year, Eskom emitted approximately 224.7 million tons of CO2, making the South African economy one of the most carbon intensive in the world.
"Emission savings are estimated at about 5 million tons of CO2 equivalent (over a 20-year life span) for the Sere wind power project and 9 million tons for the Upington solar power plant," Cheikhrouhou said.
The country is in talks with power intensive users to reduce demand by 5,000 MW or around 13 percent and prevent blackouts.
Eskom has said that power supply would be tight for the next five years, and especially until 2013, when its first new power plants come online.
(Reporting By Tarek Amara; Writing by Tim Cocks)