JSE-listed paper and plastics packaging company Mpact and independent power trading company Enpower Trading have reached financial close on a five-year renewable-energy power purchase agreement (PPA), marking an important step in Mpact's transition towards a greater supply of renewable electricity across its South African operations.

Enpower will supply about 30 GWh/y of renewable electricity to Mpact, sourced from SolarAfrica Energy's SunCentral solar project, near De Aar, in the Northern Cape, and wheeled across the national electricity grid.

Supply is expected to begin in December.

In a media release, the companies explain that the agreement will reduce the carbon intensity of Mpact’s electricity consumption and provide access to competitively priced renewable energy through South Africa's growing wheeling market.

The renewable electricity supplied to Mpact will come from Phase 2 of SunCentral, which is one of South Africa's largest utility-scale solar programmes.

SunCentral is planned to reach up to 1 GW of generation capacity at full build-out and is being delivered in phases.

Phase 1 has reached commercial operation and is already generating and wheeling renewable electricity. The companies note that construction of Phase 2, which will provide Mpact's contracted allocation, is well advanced and on track for commercial operation in December.

Mpact expects the PPA to result in it avoiding about 30 000 t/y of CO₂ emissions across its operations, supporting the company's broader decarbonisation objectives and reducing its Scope 2 emissions.

For Mpact, the agreement forms part of its ongoing focus on reducing the environmental impact of its manufacturing operations while maintaining the reliability, competitiveness and resilience of its electricity supply.

“Access to renewable electricity through wheeling is an important component of our broader environmental strategy. This agreement allows us to increase renewable electricity supply while supporting the competitiveness of our manufacturing operations,” says Mpact CEO Bruce Strong.

Initial supply under the agreement will serve Mpact's Eskom-connected mills, with the potential to extend renewable electricity supply to additional Mpact facilities, including sites connected to municipal networks.

Enpower and Mpact will also explore opportunities to extend renewable electricity supply to additional sites as further renewable generation capacity becomes available.

This may include a broader mix of generation sources, including wind, alongside solar, allowing the parties to assess how different generation profiles can support Mpact's electricity requirements over time.

"We’re pleased to bring Mpact into Enpower’s portfolio and to start delivering renewable electricity to its mills. This is the first allocation; the next step is extending supply to Mpact’s other sites and broadening the generation mix behind it,” says Enpower CEO James Beatty.