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Scatec ASA, a renewable energy solutions provider, signed the power purchase agreements for the three Kenhardt projects in the Northern Cape Province of South Africa.
The power purchase agreements were signed under the 2,000MW Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) alongside the South African government.
A first of a kind in Africa, the project will provide 150MW of dispatchable renewable energy from 5am to 9:30pm based on a hybrid installation of 540MW of solar PV capacity and 1.1GWh of battery storage. The Scatec projects were the sole renewables-only projects awarded in the technology-agnostic RMIPPP programme. This demonstrates the attractiveness, commercial viability and universal application of hybrid renewable energy facilities.
“Today’s signing acknowledges this landmark achievement by the government, as well as the private sector in achieving this milestone in the RMIPPPP process. With these agreements being signed, we are working towards financial close under the timelines and conditions as stipulated by the authorities,” says Scatec CEO Terje Pilskog.
According to the agreements signed, financial close is to be achieved within 60 days from the signature date. Once a financial close has been reached, Scatec will start construction of the projects.
“This unique solar and storage project signifies change within Africa’s renewable energy landscape and will be one of the largest renewable energy and storage projects in the world,” adds Pilskog.
Scatec will own 51% of the equity in the project with H1 Holdings, their local Black Economic Empowerment partner, owning 49%. Scatec will be the EPC provider and provide O&M as well as Asset Management services to the power plants. The Standard Bank Group is acting as lead arranger and debt provider alongside a lender group including British International Investment and they will provide non-recourse project financing to the projects.
This RMIPPP is unique in that it allows for baseload power to be delivered to the grid. The clients that Standard Bank have supported, facilitate the further development of sustainable energy solutions for South Africa by combining renewable energy solutions with battery storage, reducing South Africa’s reliance on carbon-intensive coal and diesel power plants for dispatchable power. These will be one of the first such projects financed in South Africa and the largest hybrid projects completed on the African continent.
“As a proudly African financial services provider and corporate citizen, we are deeply honoured to be able to contribute to the Government’s mission to bolster the supply of new generation capacity,” says Stephen Barnes, Global Head of Power and Infrastructure for Standard Bank Group. “This is not only about ensuring a reliable supply of power to citizens and a growing economy, but also in ensuring that we meet our obligations as a nation to reduce carbon emissions.” |
