The Stortemelk hydro power plant has been developed as a greenfield project by REH Project Development (formerly NuPlanet Project Development). The plant has an installed capacity of 4.5 MW and operates as a run-of-river power station with an annual output of 28GWh.
A single vertical Kaplan turbine is installed in a powerhouse alongside the existing Botterkloof Dam, situated on the As river in the Free State province of South Africa. The design provides a compact solution for the turbine, optimising the short penstock route while avoiding any adverse impact on existing structures, as the power station has to be constructed between two existing dams without affecting their operations and stability.
The project was awarded Preferred Bidder status under Bid Window 2 of the South African Renewable Energy Independent Power Producer Procurement (REIPPP) Programme and commenced construction in August 2014.
The project was implemented under an engineering, procurement and construction management (EPCM) structure with contracts being awarded to Andritz Hydro GmbH and Indar Electrical SL for the plant’s turbine, generator and switchgear; to Aurecon South Africa (Pty) Ltd for engineering, procurement and construction management (EPCM) services; and Eigenbau (Pty) Ltd for civil works construction. REH Operations and Maintenance was to provide operation and maintenance services.
The financing of the project was arranged through project finance, with debt finance being provided by Rand Merchant Bank and equity investment by REH and a broad based black economic empowerment entity, Vapotouch (Pty) Ltd.
The project’s successful financial closure and construction constitutes a unique achievement, as this has been the first time an EPCM contract structure has been used under the South African Renewable Energy Independent Power Producer Procurement (REIPPP) Programme since it was launched in 2011.
Benefits for South Africa and socio-economic development objectives
The Stortemelk project will contribute to Dihlabeng (Bethlehem and Clarens) Municipality’s economy through local employment and procurement. The construction of the project created more than 600 person-months of work per year, with almost half of the labour force originating from local communities. The project spending has a share of local South African content that exceeds 70% and with preferential procurement going to BEE, small and micro enterprises.
Furthermore, 30% shareholding in the project company is held by an independent black economic empowerment (BEE) entity, Vapotouch (Pty) Ltd. Additional shareholding by a local community-based charity ensures that a large share of profits are distributed to poor communities across South Africa.