Group Five hopes to build $728m solar plant

South African construction firm, Group Five, may construct a 5 billion rand solar plant to supply power utility, Eskom, with first power seen in two years, a company official said on Tuesday.

“We hope to be producing power in 2013, when it starts to come on line,” Greg Heale, director of engineering and construction, told Reuters on the sidelines of an African refinery conference.

He later said the project would supply energy to power utility, Eskom, and not mining firms, and would go ahead only if it was selected as part of South Africa’s renewable energy procurement process.

Mr. Heale said Group Five, South Africa’s fourth-largest construction firm, is expected to conclude all contractual arrangements, including off-take agreements, within the next nine months.

The project, to be located in the sun-drenched Northern Cape province, is hopefully the first of a number of phases that could be constructed on the site, eventually producing up to 450 MW, Mr. Heale said.

Africa’s largest economy is rapidly moving away from a reliance on coal, which supplies more than 90 per cent of the country’s energy needs, to energy sources such as solar, wind, and nuclear.

South Africa could produce its first solar power from a proposed $21 billion dollar solar park by 2012, eventually supplying 5,000 MW of power.

The country wants to accelerate its renewable energy programme to meet a target of 10,000 gigawatt hours by 2013. Shares in Group Five traded 0.65 per cent higher at 26.47 rand by 1059 GMT, slightly outpacing a 0.5 per cent firmer JSE all-Share index.

Last month, Group Five said diluted headline EPS for the six months to end-December fell 21 percent to 198 cents, compared with 249 cents in the same period a year earlier. The group said its total secured construction order book stood at 9.3 billion rand, little changed from the end of June.

The South African construction industry, which avoided the worst of the global economic crisis due to big projects ahead of the 2010 World Cup, is now having difficulty finding new projects as both the government and the private sector hold back on spending.

The industry is also the target of a sweeping bid-rigging probe by competition authorities.

Source : 234next