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Norway-based Scatec ASA has announced financing for three solar photovoltaic projects in South Africa with a combined capacity of 273 MW, the construction to begin in the first quarter of 2024. Scatec is to sell the generated electricity from the three solar PV plants to South Africa’s grid at US$25,8526 per MWh under a 20-year power purchase agreement with Eskom.
Norway-based Scatec ASA has announced financing for three solar photovoltaic projects in South Africa with a combined capacity of 273 MW, the construction to begin in the first quarter of 2024. Scatec is to sell the generated electricity from the three solar PV plants to South Africa’s grid at US$25,8526 per MWh under a 20-year power purchase agreement with Eskom.
The PV projects, which were approved during the fifth bid window of South Africa’s Renewable Energy Independent Power Producer Procurement Programme in 2021, have a combined value of US$270 million. The programme is a scheme of increasing electricity generation in the country through private sector investment in renewable energy technology such as solar PV, concentrated solar, onshore wind power, small hydropower (less than 40 MW), landfill gas, biomass, and biogas.
Scatec ASA signed power purchase and implementation agreements for Grootfontein PV 1, Grootfontein PV 2, and Grootfontein PV 3, in December 2022. It is anticipated the three solar plants will help South Africa eliminate an estimated 630,000 metric tons of carbon dioxide annually. Scatec is now looking forward to starting construction next year and achieving commercial operation in 2025 while powering approximately 100,000 households in the region. The company has a 51% stake in the projects while H1 Holdings, its South Africa Black Economic Empowerment partner owns 46,5% with Community Trust taking up the remaining 2,5%.
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When the projects come online, Scatec will perform engineering, procurement, and construction that accounts for 75% of the project’s total cost, and will also provide operation and maintenance as well as asset management services for the power plants. Financing for the three solar PV projects has come from equity provided by the owners and US$ 241 million of non-recourse project finance debt provided by Standard Bank of South Africa as mandated lead arranger.
