ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that on November 5, 2012 Scatec Solar (Norway), where ITOCHU owns a 37.5% stake, concluded an agreement with the South African state-owned power utility Eskom to sell power for a period of 20 years. The company was selected by the South African government as a preferred bidder for the 75 MW solar (photovoltaic) power plant in December last year.

The total cost of the project, which will be built in the Northern Cape region, is approximately 200 million euro. The first round of financing based on a financial agreement concluded with Standard Bank (South Africa) was received on November 19, 2012, and construction has started with the aim of starting operations in January 2014. The 105-hectare site will be covered by more than 300,000 solar (photovoltaic) panels, and is expected to generate more than 145 GWh a year. As a result, the plant will provide power consumption equivalent to approximately 35,000 households and, at the same time, a CO2 reduction effect of 125,000 tons a year is expected. A portion of the profits will also be ploughed back into the local economy to improve education and public health.

In the second bid conducted in May this year, Scatec Solar was also selected as preferred bidder for a total of 115 MW solar (photovoltaic) power plant. The expansion of the power supply is a matter of great urgency in South Africa, which is expected to become the new global growth engine as part of the BRICS. Since the country is as much as 85% reliant on coal-fired thermal power, there are plans to expand the scale of renewable energy to 6 GW by 2020 to diversify the power supply sources. So far, 1 GW of solar (photovoltaic) power has been approved with these two bids.

Scatec Solar is also collaborating with the International Finance Corporation (IFC), a member of the World Bank Group, on a solar power business in central Africa where the company is planning to expand its business. As well as promoting the solar power business on the African continent from its starting point in South Africa, which accounts for more than 40% of power generation on the African continent, the company is also looking into actively promoting the business in emerging countries in other regions.