Scatec- a Norwegian company that specializes in renewable energy systems has secured 540 MW solar projects alongside 225MW/1140MWh of battery storage in South Africa. Notably, for the company, the bid aligns with its goal of 15 GW of green energy along with storage through 2025.
South Africa has been focusing on enhancing its grid capacity, primarily due to the increased power outages and issues related to the maintenance of the grid. The nation has undergone incidences of blackouts to manage and monitor the situation.
Reportedly, Scatec will be carrying out the project across three sites in the Northern Cape Province of South Africa and has been granted 50 MW of contracts for each of the Kenhardt schemes, on which it aims at gaining financial close in 2021 along with targeting the grid connection by the end of 2022.
The Norway-based company will be facilitating engineering, procurement, and construction, along with taking care of operations, maintenance, and asset management of the project.
Sources close to the news reveal that the average price of the previous bids that comprised of different technology options like natural gas and renewables with energy storage of 1,300 MWh was estimated at USD 106.63 per MWh.
On the other hand, Scatec hasn’t shared the prices of the new tender has indicated that the numbers are in line with the previous bids.
The value of project CapEx is expected to be around USD 1 billion for the three solar-and-storage schemes. The Norway-based company is likely to raise the project finance debt funding from the Development Finance institutions and commercial banks, with an 80% debt leverage.
The project came with a key condition that 49% ownership must be of a black-owned business. Hence, 51% equity ownership in the Kenhardt portfolio belongs to Scatec, while 49% of it is owned by H1 Holdings- a local Black Economic Empowerment firm.