Located near the town of Pofadder in Northern Cape, the project has been developed with state-owned financier Industrial Development Corporation and KaXu Community Trust, for the Department of Energy.
KaXu is expected to generate $516m in taxes over the next 20 years in addition to generating around $890m in direct and indirect investment inflows.
Power generated from the project will be sold to Eskom under a 20-year power purchase agreement.
Abengoa owns 51% of the facility, which will provide clean and sustainable power to approximately 80,000 homes in South Africa. IDC and KaXu Community Trust own 29% and 20%, respectively.
IDC CEO Geoffrey Qhena said: "The project is based on a strong public-private sector partnership and forms part of our efforts to support government’s initiatives to introduce alternative sources of energy into the country’s energy mix as contemplated in the integrated resources plan."
Abengoa is also developing 50MW Khi Solar One plant in the region.
