Sumitomo Seeks to Build Wind Power Plant Project in South Africa

Sumitomo Corp., Japan’s third-largest trading house, said it’s seeking to build a wind power project in South Africa with capacity of as much as 600 megawatts as the nation looks to utilize more of its renewable energy potential.

The Japanese trader has been selected by the South African government as the “preferred bidder” for a project to set up and operate 40 turbines with capacity of 2.5 megawatts each, Keiichi Mihara, Sumitomo’s head of wind power, told reporters in Tokyo today. The project can be later expanded by as much as 500 megawatts, he said.

“We’ve started with wind power, but our interest isn’t limited to that or renewable energy as a whole,” Mihara said. “The country has a power shortage, and we’re interested in gas and coal-fired projects in the region also.”

South Africa plans to add as much as 41,000 megawatts before 2030 to mitigate blackouts and support growth in the economy. Of that, 9,000 megawatts, or 22 percent, will be through wind power, with Sumitomo being the first Japanese company to enter the business in the African nation, according to the trader.

The 20 billion-yen ($257 million) wind farm is one of 3,725 megawatts of renewable projects that South Africa wants to be completed by 2014. Sumitomo will own 60 percent of the wind farm, with Dorper Wind Development Ltd. taking 15 percent and Black Economic Empowerment holding the rest.

Project financing will account for 70 percent of the funds needed for the wind farm, which will use German turbines, Mihara said, without identifying the manufacturer. South Africa’s state-run utility Eskom Holdings SOC Ltd. will buy the farm’s electricity for 20 years, he said, without elaborating.

Caithness Shepherds Plant

Sumitomo owns two wind power plants in Japan, totaling 36 megawatts in capacity, and has a 50-megawatt wind project in China’s Inner Mongolia. The trading house this year took a stake in the 845-megawatt Caithness Shepherds Flat farm in the U.S. due to start next year, according to Sumitomo.

Separately, Sumitomo said today it will continue to pursue acquisitions and expand domestic market share in the information technology, media and fashion retail businesses, while trying to find opportunities to grow this division in other Asian countries, Yoshio Ohsawa, head of the trading house’s lifestyle and media division, said at a separate briefing in Tokyo today.

To contact the reporters on this story: Yuriy Humber in Tokyo at yhumber@bloomberg.net; Ichiro Suzuki in Tokyo at isuzuki@bloomberg.net

To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.