The decline of debt-crippled state utility Eskom has this year led to the worst power cuts on record in Africa's most industrialised economy. This week most South Africans have been without power for at least six hours a day.
The outages have spurred demand for solar power systems. South Africa imported solar PV panels worth nearly 2.2 billion rand ($128 million) in the first five months of this year alone, mostly from China.
Rheinmetall's facility will have initial annual capacity to produce panels with total generating capacity of at least 500 megawatts, said Jens-Patrick Helmsen, CEO of the company's South African unit Rheinmetall Denel Munitions (RDM).
"The reason we are doing this is to have independent local production. Energy is a strategic asset for national security," he told Reuters on the sidelines of a German-African business conference in Johannesburg.
He said it was too early to state Rheinmetall's total investment in the project, but the company hoped to launch production of panels within the next year.
South Africa requires 4-to-6 gigawatts of additional production to end power cuts.
The government has relaunched a drive to attract private investment in industrial-scale renewables projects to boost production capacity. It also loosened regulations on self-generation earlier this year, removing a cap on the amount of power businesses and individuals can produce before seeking government approval.
Helmsen said Rheinmetall would initially focus on producing PV panels for industrial clients in South Africa before a possible expansion to residential customers and exports to the southern African regional market.
($1 = 17.1961 rand)
(Reporting by Joe Bavier; editing by David Evans)
