Scatec secures funding for solar facility in South Africa

Scatec, a Norwegian Independent Power Producer (IPP), has secured a non-recourse loan facility of $241 million from Standard Bank of South Africa, which is operating as mandated lead arranger for the development of its Grootfontein photovoltaic plants in South Africa's Western Cape province. These solar facilities will have a combined capacity of 273 MWp.

Scatec would provide the remaining $270 million in financing for the project. Scatec's contribution completes the financing necessary to finalise the concessions awarded under the 5th Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) tender window. Scatec will retain a 51% stake in this project, while South African investment firm H1 Holdings and Grootfontein Local Community will hold 46.5% and 2.5% stakes, respectively.

The construction of the Grootfontein solar facilities is expected to commence in early 2024, with the projects' completion and commercial launch by 2025. This investment demonstrates Scatec's dedication to profitable growth and market expansion in sub-Saharan Africa, addressing the rising demand for renewable energy and supplying electricity to approximately 100,000 households in the region.

Once operational, the Grootfontein solar plants will support South Africa's renewable energy goals of clean and sustainable energy. Under the terms of a 20-year power purchase agreement (PPA), the electricity will be sold to the state-owned utility Eskom. This will result in an annual reduction of approximately 630,000 tonnes of CO2 emissions, enhancing the country's efforts to combat climate change and promote a sustainable future.