Bushveld Minerals has secured funding for the engineering, procurement and construction of the Vametco hybrid mini-grid, owned by its subsidiary Bushveld Energy.
Bushveld Energy and NESA Investment Holdings, a South African investment firm, have signed a shareholders’ agreement as strategic equity partners in the project’s development and financing, with the project being housed in a separate special purpose vehicle (SPV).
NESA will provide 60% of equity, with Bushveld Energy providing 40%. In addition, ABSA Relationship Banking has approved a ZAR64 million (approximately US$4.1 million) loan to partly fund the construction of the mini-grid project. The project’s total cost is estimated to be ZAR113 million (approximately US$7.1 million).
“We are delighted to have secured the necessary funding for the EPC of the hybrid mini-grid at Vametco. This project is the first of its kind in South Africa and will serve as a vanadium redox flow battery (VRFB) reference site in South Africa for the mining industry, utilities and other users.
“This VRFB mini-grid project is a useful proof-of-concept of the greater technological qualities of long-duration VRFB systems when used in conjunction with renewable energy. At a fundamental level, the project also perfectly demonstrates the sustainable uses for vanadium and positions it as a key metal in the green energy transition,” says Bushveld Minerals CEO, Fortune Mojapelo.
“It is also very encouraging to note that the majority of the capital invested in the mini-grid project has come from sources outside of Bushveld Minerals. This not only proves the attractiveness of the business case for long-duration energy storage using vanadium, but also demonstrates investor interest in the roll-out of VRFB technology,” concluded Mojapelo.
“We are excited to be part of this project and relationship. The project is another proof point that the ever-evolving market for solar is growing. In addition, it also highlights the important role regulatory reform is playing to enable energy availability for business,” commented Head of Renewable Energy at ABSA Relationship Banking, Justin Schmidt.
The project is part of Bushveld’s strategy to demonstrate the greater technological qualities of long-duration VRFB systems when used in conjunction with renewable energy.
The mini-grid will also use locally mined and beneficiated vanadium, demonstrating how VRFB energy solutions can provide more local value for South Africa than any other storage technology and thus ensure a Just Energy Transition in South Africa.
“NESA Investment Holdings and the NESA Power Group are proud to partner with Bushveld Energy to develop its flagship renewable energy project for Bushveld Minerals’ Vametco mine. In addition to generating long term positive benefits for the mine, the project will also be one of the first renewable energy projects in South Africa to employ vanadium battery storage technology and demonstrate its commercial viability on a large scale.
Understanding the value proposition Vanadium Redox Flow Batteries have for South Africa, we are confident that the project, once completed, will catalyse further deployment of large-scale vanadium battery energy storage systems in South Africa and contribute to securing the country’s energy future,” says Director of NESA Investment Holdings, Percy Ying.