- Scatec ASA has secured USD 102 million in financial risk reduction for their Kenhardt combined solar power/battery plant project in the Northern Cape from Norway’s state backed export credit agency Export Finance Norway (Eksfin).
- Eksfin promotes Norwegian export through financing of Norwegian exporters, their subsidiaries, and international customers.
- They offer government loans and guarantees in close cooperation with commercial banks.
- Scatec’s three projects are the only projects to reach financial close in South Africa’s controversial Risk Mitigation IPP Procurement Programme thus far. Read more
Scatec is set to build three power plants in the South African province with a total of 540 MW of installed solar power and 225 MW of battery capacity. It will be the largest investment in Scatec’s history and one of the largest such projects in the world. The combination of solar power and energy storage makes it possible to maintain a stable supply of clean electricity even when the sun is not shining.
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Eksfin has been central to reducing risk throughout Scatec’s international expansion since 2010. It has contributed a total of NOK 7 billion in guarantees for the company’s projects around the world, not only in South Africa but also in Egypt, Brazil, Malaysia, Pakistan, the Czech Republic, Honduras and Ukraine. Guarantees help to increase financial capacity for projects enabling Scatec to grow faster than would otherwise have been possible.
Financial risk reduction in the form of guarantees is often decisive for international solar power projects to go ahead. Eksfin has helped to provide guarantees ensuring Scatec delivers as contracted, while also providing loans to the companies that have purchased plants and guarantees ensuring loans will be serviced. Eksfin has also provided guarantees to various authorities, power grid operators and Scatec sub-suppliers.
Eksfin is backing Nordea guarantees ensuring Scatec constructs the plant as contracted and that owners’ equity is duly received. Loans are being provided by South Africa’s Standard Bank and UK development finance institution British International Investment (BII).
With a significant organisation in place in Cape Town, Scatec has previously delivered six large power plants in South Africa with total capacity of 448 MW. The current solar/battery project involves total CAPEX of close to USD 1 billion and will significantly increase access to renewable energy in the country.
Author: Bryan Groenendaal
