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Scatec Solar signs PPAs for three solar plants totaling 258MW in South Africa

Published 06 April 2018

Norwegian renewable energy company Scatec Solar stated that it has signed power purchase agreements for three solar plants with a combined capacity of 258MW in South Africa.

It also expects to achieve financial closure for the plants shortly. The projects involve a total investment of ZAR4.76bn ($400m).

A consortium of commercial banks and DFIs with Standard Bank in the lead is offering a non-recourse project finance of ZAR3.68bn ($310m), which accounts for 77% of the total project cost. 

In 2015, Scatec Solar secured the preferred bidder award for the three projects in Upington in the fourth bidding round under the REIPPP (Renewable Energy Independent Power Producer Procurement) Programme in South Africa.

Scatec Solar CEO Raymond Carlsen said: “South Africa continues to be an important market for Scatec Solar and we are very pleased to see that the renewables programme now is finally moving forward.

“We believe solar energy will continue to play an important role in the energy mix and provide strong support for economic growth in the country in the years to come.”

The company will build, own and operate the three solar power plants, holding a 42% stake. The remaining stake will be owned 18% by Norfund, 5% by the surrounding Community of Upington and 35% by a South African Black investor.

Scatec Solar will be responsible for engineering, procurement and construction (EPC) of the solar projects. It will also operation & maintenance as well as asset management services.

Construction of the projects is expected to begin in the third quarter of this year and grid connection could be established by the end of next year.

The three solar plants could generate about 650GWh of clean electricity annually, while avoiding 550,000 tons of CO2 emissions. 

When these new power plants start operating, Scatec Solar will hold an asset portfolio of 1.4GW. This portfolio can generate about 2900GWh of clean electricity per year with annual revenues of about NOK2.7bn ($340m). The projects are also supported by long term power purchase agreements ranging between 20 and 25 years.

Image: Scatec Solar’s 258MW portfolio could start operations by next year end. Photo: Courtesy of Scatec Solar.