The Overseas Private Investment Corporation (OPIC), the United States’ government development finance institution, said it has approved funding for a $400 million solar farm in South Africa as part of new energy projects in emerging markets.
California-based SolarReserve and Saudi Arabia’s ACWA Power will collaborate to build and operate the 100 megawatt solar plant in the Northern Cape province said OPIC in a statement.
The company said the initiative was part of President Barack Obama’s $7 billion plan to “Power Africa”. Launched in 2013, the plan aims to boost electricity access in Sub-Saharan Africa.
The initiative has prioritised expanding the continent’s capacity to generate electricity, with an additional focus on small-scale renewable energy investments.
OPIC also said it had granted South African lender Standard Bank $250 million to fund power generation and infrastructure projects in Sub-Saharan Africa.
OPIC was created in 1969 during the administration of Richard Nixon as a “soft power” tool to extend U.S. influence in the developing world by funnelling private sector money to core infrastructure projects.
South Africa is experiencing its worst power supply shortages and state-owned Eskom has been forced to resort to controlled power outages to prevent the national grid from collapse. The regular power cuts contributed to the South African economy contracting for the first time in more than a year last quarter.