PIC invests $1.8bn for two solar projects in South Africa

17 March 2015 (Last Updated March 17th, 2015 18:30)

The Public Investment Corporation (PIC) has invested ZAR22bn ($1.8bn) to acquire stakes in two solar power projects in South Africa.

The Public Investment Corporation (PIC) has invested ZAR22bn ($1.8bn) to acquire stakes in two solar power projects in South Africa.

PIC, which is the biggest pension fund in the African country, has acquired 20% stakes in the Ilanga and Xina power developments, reports Reuters.

Both the projects, located in the Northern Cape province, are expected to generate 200MW of power, which will be connected to the national grid.

PIC will also allow a loan of ZAR600m ($48.4m) for the Ilanga project, it said.

"PIC will allow a loan of ZAR600m ($48.4m) for the Ilanga project."

PIC CEO Daniel Matjila was quoted by Bloomberg as saying: "Electricity remains an important contributor to South Africa’s economic development and, for this reason, we believe that investment in the renewable energy sector is critical."

South Africa derives nearly 95% of its power requirements through state-owned utility Eskom Holdings.

The utility is presently facing obstructions in power generation due to its aging facilities, which in turn is affecting the industries due to frequent blackouts.

Though Eskom is rushing to turn new plants operational in order to meet South Africa’s growing power demands, the coal fired facilities are expected to take a longer time for construction.

At present, South Africa is looking for alternative means to meet its power requirements, which explains its investments into the renewable sector.