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IEA (2025), China’s Official Energy Finance in Emerging and Developing Economies, IEA, Paris https://www.iea.org/reports/chinas-official-energy-finance-in-emerging-and-developing-economies, Licence: CC BY 4.0
South Africa faces significant challenges regarding electricity reliability. The lack of investment, coupled with increasing demand have led to chronic load shedding, with household and industrial consumers affected. Energy-intensive sectors, such as ferrochrome smelting, face rising operational costs, production losses and growing pressure to reduce emissions in line with national and international climate objectives. To address power shortages, the South African government, since 2023, has allowed independent power producers to build power plants above 100 MW and sell electricity directly to private customers without an issued generation license.
The Tubaste Ferrochrome (TFC) solar PV power plant in South Africa’s Limpopo province responds directly to this context. Developed near the TFC smelter in the Burgersfort area, the project will deliver 100 MW of solar PV capacity in two phases: 60 MW in phase I and 40 MW in phase II over two years. It is jointly developed by the China General Nuclear Power Group (CGN)’s Africa platform, the China-Africa Development Fund (CADFund) and local partner KONA Holdings Limited. The plant is designed as a captive power facility supplying electricity directly to the TFC smelter, which has long been owned by Samancor Chrome; Chinese SOE, Sinosteel, acquired a controlling stake in Samancor Chrome in 2022.
Through a long-term PPA between the CGN’s project company and Samancor Chrome, the solar plant will provide dedicated clean electricity to the smelter, reducing dependence on the national grid and exposure to load shedding. The project will use solar PV modules and inverters from Chinese manufacturers. Northern International, a subsidiary of China’s Northern Industrial Group, will serve as the EPC contractor. After completion, CGN will assume full operational responsibility for the solar plant.
Once fully operational, it is expected to generate about 147 GWh of solar electricity per year, contributing to South Africa’s broader efforts to decarbonise heavy industry. The project also demonstrates how foreign capital, coupled with industrial demand, can support both energy security and lower-carbon production in one of Africa’s most important mining economies.
The project was announced during the 2024 China-South Africa Economic and Trade Forum, receiving support from both countries.
The TFC project is financed through a joint equity and debt structure, with CGN as the majority shareholder. Total project costs are estimated at more than RMB 500 million (about USD 70 million), with equity contributions from the CGN, CADFund and KONA Holdings. The exact equity split has not been disclosed.
In September 2024, the CGN and CADFund signed a financing agreement with the Johannesburg branch of the China Construction Bank (CCB) for the project. While detailed terms on the tenor, pricing and security have not been made public, the structure is consistent with limited- or non-recourse project finance, in which lenders rely primarily on project assets and contracted cash flows for repayment. The long-term PPA with Samancor Chrome underpins revenue, providing predictable cash flows that support the bankability of the financing in a higher-risk market.
CADFund’s role is particularly important. As a state-backed equity fund focused on Africa, fully funded and initially managed by CDB, it helps absorb part of the early-stage risk, strengthens due diligence and signals policy support, which in turn facilitate participation by Chinese commercial banks such as CCB. The involvement of a Chinese-controlled off-taker (Sinosteel-owned Samancor Chrome), Chinese EPC and Chinese equipment suppliers further reduces co-ordination risk and allows the financing structure to be tailored to the needs of the mining-power partnership.
The TFC solar PV project shows how industrial demand can anchor clean energy investment in EMDE. Rather than competing for scarce grid capacity or public funding, the project is structured around a single, creditworthy off-taker with a clear need for reliable, affordable energy. This model can be replicated in other industrial facilities across Africa, especially in countries where grid constraints and high wholesale electricity prices are constraining growth and delaying decarbonisation.
This case also illustrates China’s “SOEs going out as a group (抱团出海)” strategy. Chinese state-linked entities appear in almost every key role of this project: the CGN as a developer and operator, CADFund as the equity co-investor, Chinese manufacturers as equipment suppliers, Northern International as the EPC contractor and Sinosteel-linked Samancor Chrome as the industrial off-taker. This approach allows China to export capital, management and technology as an integrated package which lowers transaction costs, accelerates execution and improves perceived bankability in environments where institutional capacity or co-ordination can be challenging.
For South Africa and the wider region, the project signals a growing opportunity to pair industrial decarbonisation with energy security. By reducing the TFC smelter’s exposure to load shedding and fossil-based electricity, the project supports more stable output of ferrochrome, a key export commodity, while cutting emissions. If replicated at scale, similar captive renewables and storage projects could help unlock a pipeline of low-carbon industrial investments across the continent, especially where international partners can provide risk-tolerant capital aligned with domestic regulatory reforms.
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