Scatec inks 258MW South Africa solar deals

Norway’s Scatec Solar has signed a deal to build, own and operate 258MW of solar projects in South Africa.

Scatec is one of the first players to move into the country since South Africa’s Department of Energy gave the green light to several Renewable Energy Independent Power Procurement Projects (REIPPP), including the Power Purchase Agreements with state utility Eskom, paving the way for 59bn rand ($5bn) in new direct investments in the energy sector.

Scatec, and its partners, said they are “shortly” expected to achieve financial close for the three solar PV plants it has planned.

The deals come after in April 2015, Scatec was awarded preferred bidder status for the projects in Upington in the fourth bidding round under the REIPPP programme.

The three solar projects will involve a total investment of 4.76bn rand ($400m). A consortium of commercial banks will be providing 3.68bn rand in project financing, accounting for 77% of the total project cost, Scatec said.

Construction start is expected in the third quarter of 2018 with grid connection towards the end of 2019.

Scatec will hold a 42% interest in the development, together with KLP Norfund Investments on 18%, the surrounding Community of Upington 5% and a South African Black investor, which will hold the remaining 35% of the equity.

In addition, Scatec said it will be the engineering, procurement and construction (EPC) provider for the projects and provide operation & maintenance as well as asset management services to the power plants.

"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", said Raymond Carlsen, chief executive of Scatec Solar.

Meanwhile, after South Africa’s Minister of Energy, Jeff Radebe, officially signed the REIPPP deals following years of delays, more companies have been announcing deals in the country’s renewable energy sector.

One of these involves an important technology advancement for South Africa at the 100MW Redstone solar thermal power project in the Northern Cape province.

This deal comes after Eskom signed a 20-year power purchase agreement with a consortium led by SolarReserve and International Company for Power and Water (ACWA Power) for the project.

Redstone, which is adjacent to the 75MW Lesedi and 96MW Jasper solar projects developed by SolarReserve, will have 12 hours of energy storage.