HomeSmart MoneyAfter attaining financial close, Scatec works on solar and battery project in...

After attaining financial close, Scatec works on solar and battery project in South Africa

Scatec ASA, a renowned producer of renewable energy solutions, has begun building on the three Kenhardt projects in South Africa’s Northern Cape Province under the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) after attaining financial close.

Once operational, the project will have a total solar capacity of 540 MW and a battery storage capacity of 225MW/1,140MWh, and will offer 150 MW of dispatchable power to the Kenhardt region under a 20-year Power Purchase Agreement in a country that is currently experiencing power shortages.

“Achieving commercial and financial close for the Kenhardt projects shows true commitment by our Scatec team and partners. This project is a first of its kind and will be one of the world’s largest solar and battery facilities. We are now looking forward to starting construction of this unique and exciting project, which will be a major contribution to South Africa’s economy and green energy sector,” says Scatec CEO Terje Pilskog.

“This is an important milestone in the procurement of renewable energy and proves that the sector can be relied upon to deliver much-needed electricity capacity to the grid,” adds Jan Fourie, General Manager of Sub-Saharan Africa.

The project will be the greatest investment in Scatec’s history, with a total capex of about ZAR 16.4 billion (USD 962 million) to be financed by stock from the owners and non-recourse project debt of ZAR 12.4 billion (USD 727 million). A group of lenders, including The Standard Bank Group as arranger and British International Investment, will provide the debt. Kenhardt initiatives are supported entirely in local currency.

Scatec will control 51% of the project’s equity, with H1 Holdings, our local Black Economic Empowerment partner, owning the remaining 49%. Scatec will provide Engineering, Procurement, and Construction (EPC) services as well as Operation and Maintenance and Asset Management to the power plants. Scatec’s Development and EPC contract for the project is valued at roughly ZAR 13.7 billion (USD 800 million).

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