AIM-listed Bushveld Minerals has secured funding for the engineering, procurement and construction (EPC) of the Vametco hybrid mini-grid, which is owned by its 84%-owned energy subsidiary, Bushveld Energy.
Bushveld Energy has completed the development and achieved financial closing for a 3.5 MW solar PV plus a 1 MW / 4 MWh Vanadium Redox Flow Battery (VRFB) hybrid mini-grid project for Vametco, which will operate as a funded independent power producer (IPP).- Bushveld Energy and NESA Investment Holdings, a South African investment firm, have signed a shareholder’s 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 has provided 60% of the equity, while Bushveld Energy has provided 40%. Bushveld Energy will recognise a development fee of ZAR5.6 million as revenue from the project upon financial close.
- ABSA Relationship Banking has approved a R64-million loan to part fund the construction of the mini-grid project.
- The project's total cost is estimated to be R113-million.
- It will be built on a turnkey basis by NESA Power, who have already executed an Engineering, Procurement and Supply (EPC) Agreement alongside the SPV.
- As previously announced, the project's 1 MW/4 MWh VRFB will be supplied by CellCube, a VRFB original equipment manufacturer in which Bushveld owns an indirect 25.25% interest.
- Vametco has sold 26 mtV for the production of electrolyte, required for the VRFB which is currently being converted into electrolyte overseas.
- Site preparation for construction began in Q1 2022. The project is now fully funded and is expected to be completed in H1 2023.
Fortune Mojapelo, CEO of Bushveld Minerals, commented:
“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 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. 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 market in the roll-out of VRFB technology.In the future we expect to see increased demand for projects combining solar PV and VRFB technology, especially in regions with similar challenges to South Africa.”