Norwegian renewable energy company Scatec has started building three co-located solar projects, totalling 540 MW, and a 225 MW/1.1 GWh energy storage facility in the Kenhardt region in northwestern South Africa, after reaching a US$962m financial close. Once operational the project will provide 150 MW of dispatchable power under a 20-year Power Purchase Agreement (PPA) with the Kenhardt region.
The launch of construction comes six weeks after Scatec secured PPAs for the three projects in the Northern Cape region, and nine months after the company won a 2021 tender to deliver those projects under South Africa’s Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).
Scatec will own a 51% equity in the project, with H1 Holdings, a local Black Economic Empowerment partner, owning 49%. The project is Scatec’s largest, with a total capex of approximately ZAR16.4bn (US$962m) to be financed by equity from the owners and ZAR12.4bn (US$727m) in non-recourse project debt, funded in local currency.
South Africa targets the addition of 16 GW of wind and solar by 2030 (from 2018 levels), made up of 9.5 GW of wind and 6.5 GW of solar. In 2021, solar accounted for 11% of the country’s installed capacity with 6.2 GW (+1.4 GW since 2018).
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