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In a significant move towards advancing renewable energy solutions, Scatec ASA, a prominent player in the field, has inked a 10-year power purchase agreement (PPA) with Statkraft Energia do Brasil Ltda in Brazil. This agreement covers a 142-megawatt (MW) solar plant set to be established in Minas Gerais, Brazil.
The PPA, denominated in Brazilian Real (BRL), encompasses approximately 75% of the anticipated power output, with the remainder poised to be sold under short, medium, and long-term contracts. The project boasts an estimated equity return surpassing Scatec’s hurdle rate of 1.2 times the project’s cost of equity.
With an estimated total capital expenditure (capex) of USD 94 million, the solar plant’s financing will primarily rely on non-recourse financing, covering about 63% of the amount, while the remainder will be funded by equity from Scatec. Additionally, Scatec is currently engaged in advanced discussions with lenders regarding a debt facility of approximately EUR 15 million, aimed at partially financing Scatec’s equity share in the project.
The financial close and construction commencement for the solar plant are anticipated in the latter half of the year, with commercial operations slated to commence by the end of 2025.
Terje Pilskog, CEO of Scatec, expressed enthusiasm about the project, emphasizing its strategic significance as the company’s third solar venture in Brazil. He highlighted the importance of securing a PPA with Statkraft, a renowned renewable energy player and trading company, for their inaugural plant in the southeast submarket, underscoring Brazil’s significance as a focus market for Scatec.
Scatec will retain 100% ownership of the solar plant initially, with plans to introduce equity partners post-commercial operation to enhance value creation. Additionally, Scatec will serve as the Engineering, Procurement, and Construction (EPC) manager for the project, albeit with a limited scope.
Natasha Gaertner, VP of Statkraft Markets, hailed the partnership with Scatec as a significant stride towards Brazil’s sustainable energy future. She emphasized the shared vision for a greener tomorrow and commitment to providing clean, reliable energy.
Scatec’s portfolio in Brazil already includes two operational solar plants: the 531 MW Mendubim solar plant and the 162 MW Apodi solar plant, both developed in partnership with Equinor and other entities.
Statkraft Energia do Brasil Ltda, a subsidiary of Statkraft AS, has been active in Brazil since 2012, operating 26 wind and hydropower plants with an installed capacity of over 2 GW in the country.
The partnership between Scatec and Statkraft underscores the growing momentum towards sustainable energy solutions in Brazil and the wider global context. |
