Dual-listed independent power plant developer Ipsa has started the drawdown of a R15.4-million loan facility granted by the Industrial Development Corporation (IDC).

The loan would be used to repay Ipsa subsidiary Newcastle Cogeneration’s indebtedness and to pay the final costs of installing two Jenbacher engines, which added some 4 MW of new capacity on site.

Works to install the engines would start later this month, while the planned commercial operation date was set for early September. Once the engines entered service, output would be sold under the newly extended medium-term power purchase programme contract with State-owned Eskom.

The loan would be repayable in 48 monthly instalments from April 1, 2016.

The company’s working capital remained tight and was being carefully managed until the expected receipt of the remaining balances owed by Rurelec from the sale of turbines. 

“We are very pleased that the IDC is now supporting us in the expansion of the plant at Newcastle. We hope that this will be the first step in Ipsa’s return to expansion of power generation capacity in South Africa,” Ipsa CEO Peter Earl said.