Nov. 06, 2012
Sumitomo Subsidiary Signs Key Agreements for Dorper Wind Farm Project in South Africa
Sumitomo Corporation (President and CEO: Kuniharu Nakamura; Head Office: Chuo-ku, Tokyo) hereby announces that it has entered into the key agreements pertaining to the 100 MW Dorper wind farm project for which a Sumitomo Corporation-led consortium was selected as a preferred bidder in November 2011 under the IPP Procurement Programme for Renewable Energy, implemented by the South African Department of Energy (the "DOE"). Specifically, on November 5, 2012, Dorper Wind Farm (RF) Pty Ltd, a project company led by Sumitomo Corporation, through its wholly owned local subsidiary, and its local partner Rainmaker Energy, through its subsidiary Dorper Wind Development (Pty) Ltd, entered into a 20-year power purchase agreement (the "PPA") with Eskom Holdings SOC Limited, a state-owned utility company and on the same day the project company entered into a contract with the DOE, under which the payment obligations of Eskom under the PPA are guaranteed by the DOE. Upon completion, this project will be one of the first large-scale renewable energy IPP projects in South Africa.
Financing agreements for the 14 billion Yen project financing (denominated in South African Rand) with Nedbank Capital, ABSA Capital (two major South African banks) and Sumitomo Mitsui Banking Corporation have also been executed. This loan covers 70 percent of the approximately 20 billion Yen project cost. Dorper Wind Farm has also contracted Euler Hermes, one of the world's leading export credit agencies, to guarantee about 12 billion Yen, representing 80 percent of the total loan.
The Dorper Wind Farm project will consist of 40 wind turbines, each having a generating capacity of 2.5 MW, manufactured by German-based Nordex. Construction of the Dorper project is scheduled to commence during November 2012, with completion and commercial operation scheduled for July 2014.
The Dorper Wind Farm will also contribute to the development of South Africa by implementing a range of initiatives within this project. These include working with local companies that conduct business in line with the government policies to improve the status of black South Africans, based on the Black Economic Empowerment (BEE) program, and providing job opportunities to local South Africans over a period spanning more than two decades from construction through operation. In addition, a portion of annual revenue will be used to promote economic development programs as part of the Dorper project's commitment to contribute to the enhancement of local communities. Furthermore, Dorper Wind Farm has established a local community trust, which will effectively hold an equity stake in excess of 10 percent in the Dorper Wind Farm project company. The community trust will directly benefit the local communities, who are predominantly black South Africans.
Sumitomo Corporation will continue to contribute to the long-term conservation of the global environment through its renewable energy projects, while conducting localized activities that provide broad assistance to communities in the region, in order to achieve further economic and social development.
- Wind farm site, including "Dorper" sheep (namesake of the project)
Corporate Communications Department,