An EU bank is giving a €50 million (£39.9 million) fund to South Africa for its first solar tower initiative.

The 50MW Khi Solar One project will consist of a 200m high tower and more than 4,500 heliostats, which are large moving mirrors, to reflect light onto the tower. The plant will use concentrated solar technology that harnesses solar radiation by focusing on a small area to produce steam, which will drive a turbine and produce electricity. It is expected to store thermal energy for two hours and prevent around 183,000 tons of carbon emissions every year.

Pim van Ballekom, the European Investment Bank’s Vice President responsible for sub-Saharan Africa said: “Development of the Khi Solar One project is a milestone that will help convert South Africa’s immense solar resource into clean and sustainable power that can be stored and complements more intermittent renewable energy sources.”

Jointly owned by Abengoa, the Industrial Development Corporation (IDC) and the Black Economic Empowerment (BEE) programme, the plant will be selling its electricity to South Africa’s state-owned energy utility Eskom for 20 years.

The project is believed to be the first large solar power project in sub-Saharan Africa and one of the first private sector renewable energy projects. It is expected to help South Africa meet its renewable energy target of 17,800MW by 2030.