Three co-located energy storage projects in South Africa by renewable energy developer Scatec will receive US$102 million in guarantees from Norway’s state-backed credit agency Eksfin.
As previously reported by Energy-Storage news, Scatec is starting construction on three projects in the Kenhardt region that will provide a combined 540 MW of solar PV and 225 MW/1,140 MWh of energy storage.
According to earlier reports, Export Finance Norway, or Eksfin, is providing a financial risk reduction package totaling 1.2 billion NOK (US$102 million) for the project, which accounts for about 10% of the project’s overall costs. Grid operator ESKOM procured the projects through its Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), which aims to reduce capacity shortfalls on the grid.
The package is designed to ensure Scatec delivers on the projects as contracted, by backing financier Nordea’s guarantees and ensuring that owners’ equity is duly received. The other banks that are financing the projects are South Africa-based Standard Bank and UK development finance institution British International Investment.
The package includes loans to the companies that have purchased plants and guarantees, ensuring loans will be serviced. Guarantees have also been provided to relevant authorities, power grid operators and Scatec’s own sub-suppliers.
Scatec CEO Terje Pilskog commented, “The world is at a crossroads amid the green shift and the energy crisis. Norway, as an energy nation, is well placed to play a central role in the development of renewable energy and reaching global climate goals.”
“Eksfin and other Norwegian financial actors are important contributors in helping us get there. Eksfin has certainly been a crucial factor in our international expansion.”
Scatec will own 51% of the equity in the Kenhardt portfolio, while local investment firm H1 Holdings will hold the remaining 49%. Scatec is providing its engineering, procurement, and construction (EPC) services for the projects and will also be the long-term operations and maintenance (O&M) and asset management service provider.
The three projects—Kenhardt 1, 2, and 3—are scheduled to connect to the grid by the end of 2022, and 20-year power purchase agreements for dispatchable energy were signed in June of this year.
