MINING firm Harmony Gold’s share price rose after it said yesterday it had started construction of three 10 megawatt solar photovoltaic plants as part of its environmental, social and governance (ESG) programme as it secured a R1.5 billion “Green Loan”.
The share price soared 7.7 percent at R55.94 on the JSE in late afternoon trade yesterday.
This as South African firms have been operating without the certainty of reliable electricity due to state-owned utility Eskom’s woes. Under new legislation South Africa’s government will allow private investors to build their own power plants with up to 100 megawatts of generating capacity.
Harmony said demand for sustainability has multiplied in the past few years as shareholders increasingly expect companies to take steps toward greater transparency and use cleaner energy.
The miner said the first phase of its renewable energy project consisted of a 30 megawatt solar energy plant in the Free State province of South Africa.
The second phase would add 137 megawatts at its various longer-life mines, which the company said would deliver more than R500 million a year in cost savings once it reaches full production in fiscal year 2025.
Harmony said the third phase was in the planning stage and was progressing as expected.
Peter Steenkamp, Harmony’s chief executive, said, “Responsible stewardship is the first of our four strategic pillars. ‘Mining with purpose’, has shown that there is an inextricable link between ESG performance and financial performance. Through extending the lives of mines, responsibly rehabilitating land and our ongoing economic support in the countries we operate in, we have shown ESG in action.
“The ESG-linked financial transactions that we have concluded, alongside the construction of the solar energy plants, are a watershed moment for Harmony and our host communities. Not only will these transactions help us to deliver on our environmental and social obligations and undertakings, but they will also de-risk the business and deliver many socio-economic benefits,” he said.
Steenkamp added that mining with purpose was ensuring that the firm’s investors and other stakeholders continued to derive value and positive returns in a global climate of energy uncertainty.
Harmony also announced that it had concluded a new syndicated multi-tranche, multi-currency, loan facility aimed at sustainable development.
Its Green Loan was a R1.5 billion term loan ring-fenced for renewable energy projects as part of Phase 2 of Harmony’s renewable energy roll-out; and sustainability-linked loans consisting of a R2.5bn revolving credit facility; a $300 million (R4.6bn) revolving credit facility and a $100m term loan.
Harmony said the Green Loan was designated to fund Phase 2 of Harmony’s solar PV strategy (Phase 2 targets up to 137MW of peak generation capacity).
“The cash flow profile of this loan has been tailored to closely match the expected cash flow of the solar PV build, followed by the expected savings in energy costs for Harmony’s South African mining operations. Phase 2 of the solar PV project is currently in the feasibility stage and we are working on obtaining the necessary permits and licences,” it said.
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