• INSIGHT
Our Energy , Environment and ICT unit is pursuing a number of significant transactions in the C & I market and has also finalised a few landmark deals which include , among others , the 100MW ABO Wind Project located in the North West Province which entails the development , construction , operation and maintenance of a 100MWAC solar PV renewable energy facility . The project will supply power to four of ARM Platinum ’ s sites ( Bokoni Mine , Komati Mine , Two Rivers Mine and Modikwa Platinum Mine ) through an Eskom wheeling arrangement . Under this arrangement , the buyer will be liable to pay for the energy that is metered at the seller ’ s ( IPP ) point of delivery . The Project is also adjacent to the Tronox PV projects ( ABO Wind Lichtenburg 2 PV and ABO Wind Lichtenburg 3 PV sites ) which were developed by the same investors and also funded by the DBSA . DBSA participated in the senior debt , mezzanine debt as well as BEE funding in these respective projects .
Despite the number of opportunities available in this sector , the key challenge remains severe grid constraint experienced on the Eskom grid , particularly in areas where wind and solar resources are abundant such as the Northern Cape , Western Cape and Eastern Cape . These grid constraint issues need to be dealt with as a matter of urgency in order to enable further energy generation and to avoid a complete collapse of the grid system .
The other energy technology which has also received significant focus is the Green Hydrogen economy . This technology is based on the generation of hydrogen , a universal , light , and highly reactive fuel , through a chemical process known as electrolysis . This method uses an electrical current to separate the hydrogen from the oxygen in water , and the process is able to produce energy without emitting carbon dioxide into the atmosphere . Green hydrogen also has significantly lower greenhouse gas emissions than grey hydrogen , which is derived from fossil fuels without carbon capture . There are , however , some questions about the viability of green hydrogen given its high production costs , which will require significant amount of commercialisation before the generation of the energy becomes more cost effective to produce .
According to research report conducted by Grand View Research , the Asia Pacific dominated the global market in 2022 and accounted for the largest revenue share of over 34.94 %. China
led the Asia Pacific regional market in 2022 , in terms of revenue . The presence of a high number of refineries in the Asia Pacific region , particularly in major countries such as China and India have driven the utilisation of hydrogen generation in the region . Hydrogen producers in the region are looking to also expand their geographical reach and target countries like Vietnam , Indonesia and South Africa among other developing nations , to boost their revenue . There are a few green hydrogen opportunities that are being pursued locally . South Africa has reached an agreement to launch a USD1-billion blended finance fund to help accelerate the development of the green hydrogen sector in the country . The fund is supported by the climate finance investment firm , Climate Fund Managers ( CFM ), as well as Invest International of the Netherlands , financial services group Sanlam , the Development Bank of Southern Africa and the Industrial Development Corporation ( IDC ), in collaboration with other strategic partners .
The DBSA is currently investing in several green hydrogen projects which include the support of Hive Hydrogen South Africa , which entails the development of a green hydrogen and ammonia plant comprising of 1 200MW electrolyser ; a concomitant renewable energy feed of 1 250MW of Solar PV and 2 230MW of Onshore Wind ; and a green ammonia plant to produce 940 000 – 1 000 000 tonnes of green ammonia per annum . The Hive project , together with associated infrastructure , has been registered as one of the Strategic Integrated Projects ( SIPs ). The project has the potential to attract and unlock foreign direct investment , local funding , climate and green capital given the Just Transition initiatives . There are other green hydrogen transactions that the bank is pursuing which are seeking project preparation support funding .
Local fuel cell and electrolyser development could lead to export sales as well as building a South African Green Hydrogen ecosystem , resulting in jobs and significant skills development . •
The DBSA is currently investing in several green hydrogen projects which include the support of Hive Hydrogen South Africa .
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78 • African Mining • January 2024 www . africanmining . co . za