Dec. 08, 2011
Sumitomo Corporation Selected as a Preferred Bidder for Wind Farm Project in South Africa
Sumitomo Corporation (President and CEO: Susumu Kato; Head Office: Chuo-ku, Tokyo) and its local partners have been selected as a preferred bidder for a 100MW wind farm project, having jointly submitted a bid for the Request for Proposals ("RFP") under IPP Procurement Programme for Renewable Energy implemented by the South African Department of Energy ("DOE").
Through the RFP, the South African government seeks to procure a total of 3,725MW of electricity from renewable energy sources by the end of fiscal year 2014. Having been selected as a preferred bidder, Sumitomo Corporation will become the first Japanese company to participate in a wind power generation project in South Africa.
A total of roughly 20 billion yen will be invested to construct the Dorper wind farm, which will consist of 40 2.5MW wind turbines extending over a vast pastured area. The electricity generated will be sold under a 20-year Power Purchase Agreement to be concluded with Eskom Holdings SOC Limited, a state-owned utility company, with a payment guarantee from the DOE.
Sumitomo Corporation regards renewable energy as one of core business area and is proactively fostering its wind, biomass, and solar photovoltaic power generation businesses both within and outside Japan. Domestically, the company currently manages two wind farms producing a total of 36MW of electricity. Outside Japan, it operates a 50MW wind farm in China's Inner Mongolia Autonomous Region as well as a 120MW wind farm in the U.S. state of Texas. China and the U.S. respectively comprise the world's largest and second-largest markets for wind power. Furthermore, this March, Sumitomo Corporation successfully took a stake in the 845MW Caithness Shepherds Flat wind farm project as its second investment in the wind farm in the United States, which, when completed, will be one of the world's largest wind farms. Construction work on Shepherds Flat is currently underway as planned, with completion set for next year. In addition to these two markets, Sumitomo Corporation has been seeking a new business investment opportunities in the other countries in order to enter into a new market where new programs in support of renewable energy will be introduced.
In light of the remarkable growth of the area south of the Sahara desert, including South Africa, Sumitomo Corporation this year established a sub-Saharan office and, led by its branch in Johannesburg, has been actively promoting the development of new business in the region. To provide relief to sub-Saharan countries, which are often beset by electricity shortages in such a way that threatens to hinder their future economic development, Sumitomo Corporation is focusing on power generation by not only renewable energy sources but also by coal, gas and other resources as well as on power transmission and transformation as its core businesses to be promoted in the region. The Dorper wind project therefore represents a melding of Sumitomo Corporation's strategies for its wind power generation business with those targeting sub-Saharan Africa.
Sumitomo Corporation will continue to make contributions to the long-term conservation of the global environment through its renewable energy projects, while conducting localized activities in Africa that provide broad assistance to countries in the region seeking further growth and development.
【Outline of the Dorper wind farm】
Location: Eastern Cape, South Africa
Investors: Sumitomo Corporation : 60%
Dorper Wind Development (Pty) Ltd: 15%
BEE companies* :25%
Total project cost: About 20 billion yen
Planned Commercial Operation Date: Around spring of 2014
* BEE stands for "Black Economic Empowerment." "BEE companies" refers to local companies who conduct business in line with government policies to improve the status of South Africa's black population, who were oppressed under the apartheid system.
Construction site for the wind farm:
Corporate Communications Department,