Globeleq achieves financial close for Africa’s largest standalone battery energy storage system in Northern Cape

Globeleq, a leading developer and operator of power projects across Africa, alongside African Rainbow Energy, has announced the financial close of the Red Sands battery energy storage system (BESS) in South Africa. This 153 MW/612 MWh project is the continent’s largest standalone battery energy facility to reach this milestone. The announcement was made on July 1, 2025, at the Africa Energy Forum held in Cape Town, marking a significant advancement in South Africa’s energy infrastructure. Globeleq is privately owned by British International Investment and Norfund, while African Rainbow Energy is a joint venture between African Rainbow Energy and Power and Absa Bank.

The project, strategically located near Upington in the Northern Cape province, will supply power to the National Transmission Company of South Africa (NTCSA) under a 15-year power purchase agreement. The Red Sands BESS is designed to alleviate pressure on the grid by reducing congestion and improving stability, playing a pivotal role in the country’s transition towards renewable energy and decentralised generation.

Why is the Red Sands battery project considered a pivotal milestone in Africa’s renewable energy transition?

Red Sands BESS represents a watershed moment for grid-scale battery deployment in Africa due to its scale, timing, and role in bolstering transmission reliability. While Africa has seen solar and wind generation grow steadily over the past decade, large-scale energy storage remains in its infancy. The financial closure of the Red Sands project signals a shift from feasibility to execution, establishing a precedent for utility-scale battery investments across the continent.

Historically, energy storage in Africa has been constrained by underdeveloped policy frameworks, limited access to capital, and low grid flexibility. The Red Sands project overcomes these challenges through structured public-private partnerships and strategic financing arrangements. Its location in Northern Cape, a region already dense with renewable generation capacity, positions the facility as a balancing hub for variable energy output from existing solar and wind assets.

Institutional investors view the project as a validation of Africa’s ability to absorb and deploy long-duration energy storage technologies. This optimism is based on Globeleq’s track record, which includes over 1,794 MW of generating capacity and a further 485 MW under construction across seven African countries.

How did Globeleq and African Rainbow Energy structure the financial closure of the Red Sands project?

Globeleq and African Rainbow Energy secured approximately ZAR 5.4 billion (around US$300 million) in debt financing from two of Africa’s most prominent financial institutions—Absa and Standard Bank. The financing deal is not only one of the largest for standalone energy storage in Africa, but also a strategic demonstration of local bank confidence in renewable infrastructure.

According to statements from project partners, the financing includes both senior debt and corporate banking facilities that are tailored for long-term energy infrastructure. China Energy Engineering Corporation was contracted for engineering and procurement, while technology partner Sungrow will supply the BESS technology along with a long-term service agreement.

The strong domestic financing base—without overreliance on international development banks—was noted by industry observers as a sign of maturing capital markets for energy transition projects in sub-Saharan Africa.

What employment and community development commitments are tied to the Red Sands BESS project?

In addition to energy supply benefits, the Red Sands battery project is expected to generate substantial employment during both the construction and operational phases. Approximately 250 temporary construction jobs and 80 permanent operational roles will be created, with a deliberate focus on local workforce participation. This aligns with South Africa’s broader energy transition strategy, which emphasises community upliftment and inclusive economic growth.

Beyond jobs, the project will fund upgrades to grid infrastructure in collaboration with Eskom and NTCSA. These upgrades are intended to improve the reliability of transmission lines and substation networks in the Northern Cape. Such investments in supporting infrastructure ensure that energy storage projects don’t just stand alone but contribute holistically to power system optimisation.

What role will the National Transmission Company South Africa play in the Red Sands battery deployment?

The National Transmission Company South Africa (NTCSA), recently separated from Eskom’s vertically integrated model, is a critical offtaker and infrastructure partner in the Red Sands BESS project. The 15-year power purchase agreement with NTCSA forms the contractual backbone of the project, ensuring a stable revenue model for developers and financiers.

NTCSA’s participation also highlights the evolving structure of South Africa’s electricity market. With the unbundling of Eskom into generation, transmission, and distribution entities, new opportunities have emerged for private-sector infrastructure developers to integrate more flexibly with the grid. The Red Sands project is emblematic of this shift, operating as a standalone asset that provides grid services, arbitrage opportunities, and dispatchable power.

The involvement of the Ministry of Electricity and Energy, led by Dr. Kgosientsho Ramokgopa, further underscores the project’s strategic alignment with national energy policy. During the Africa Energy Forum, both the minister and NTCSA interim CEO Segomoco Scheppers participated in the project signing, highlighting the political and regulatory commitment to energy storage.

How does the Red Sands BESS fit into Globeleq’s broader renewable energy strategy across Africa?

The Red Sands facility marks Globeleq’s second utility-scale battery storage project, building upon a growing portfolio that includes 13 solar, wind, and hybrid plants across South Africa, Kenya, Mozambique, and Egypt. Additionally, the Menengai geothermal plant in Kenya, currently under construction, adds further geographic and technological diversity.

Globeleq’s expansion into energy storage demonstrates a strategic pivot toward integrated renewables and grid resilience. The company’s development approach combines asset acquisition—such as its 2023 acquisition of the Red Sands development from African Green Ventures—with in-house project management via its South African subsidiary.

By coupling battery storage with existing renewable portfolios, Globeleq is addressing one of the continent’s most pressing power challenges: intermittency. Analysts anticipate that additional storage projects will be announced in Egypt and Mozambique in the coming year, likely leveraging similar financing and technology models.

What is the expected impact of the Red Sands battery project on investor sentiment and regional energy markets?

Institutional sentiment toward the Red Sands project has been broadly positive, driven by both its financial structuring and long-term policy alignment. Analysts see this as a signal that Africa’s energy storage sector is investable at scale, with proven bankability for standalone assets.

The involvement of major banks like Absa and Standard Bank adds further credibility, as both institutions are increasingly focused on financing low-carbon infrastructure. Absa, for instance, has committed to aligning its portfolio with Africa’s energy transition goals, while Standard Bank has positioned itself as a leader in sustainable finance across emerging markets.

Investor enthusiasm is also tied to the project’s replicability. The financing and technical frameworks used for Red Sands could be applied to similar BESS deployments in high-renewable penetration zones like Kenya’s Rift Valley, Egypt’s solar corridors, or Namibia’s hybrid systems. This potential for scale makes Red Sands more than a standalone project—it is a template for what large-scale energy storage in Africa could become.

What is the long-term outlook for standalone battery energy storage systems in sub-Saharan Africa?

Looking ahead, analysts expect that standalone BESS projects will become central to Africa’s energy mix. As solar and wind continue to increase their share of installed capacity, the demand for flexible, dispatchable resources will grow in parallel. Projects like Red Sands are seen as proving grounds for both operational models and financial innovation.

Policy frameworks are also maturing. South Africa’s Integrated Resource Plan and recent energy transition plans include explicit support for storage technologies. Additionally, international climate financing mechanisms—such as blended finance facilities and just energy transition partnerships—are expected to play a catalytic role in unlocking further capital.

Over the next five years, Globeleq and its peers are expected to scale BESS deployments to new regions, with some projects likely to exceed the capacity of Red Sands. However, the Red Sands facility will remain a landmark due to its early-mover status and role in unlocking future investment flows.