Eksfin provides guarantees in support of major Scatec project in South Africa

Source: press release, 30 August 2022

Site of the Scatec combined solar power and battery plant under preparation in the Northern Cape, South Africa
Site of the Scatec combined solar power and battery plant under preparation in the Northern Cape, South Africa (photo: Scatec)

Renewable-energy solutions provider Scatec ASA has secured NOK 1.2 billion (USD 102 million) in financial risk reduction for combined solar power/battery plant project in the Northern Cape from state-backed export credit agency Export Finance Norway (Eksfin).

Scatec is set to build three power plants in the South African province with a total of 540 MW of installed solar power and 225 MW of battery capacity. It will be the largest investment in Scatec’s history and one of the largest such projects in the world. The combination of solar power and energy storage makes it possible to maintain a stable supply of clean electricity even when the sun is not shining.

Key expansion facilitator
“We are proud to collaborate with Scatec, one of the many renewable-energy companies Eksfin has financed. Supporting solar energy projects is critical at a time when the world desperately needs more clean energy,” says Eksfin Managing Director Tone Lunde Bakker.

“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,” says Scatec CEO Terje Pilskog.

“At Nordea we greatly appreciate our long and close cooperation with Scatec as the company’s main bank. Together with Eksfin we have devised good solutions that have supported the company’s growth and its important contribution to renewable-energy development and the green shift,” says Mona Tørudstad, Head of Energy Norway at Nordea.

Eksfin is backing Nordea guarantees ensuring Scatec constructs the plant as contracted and that owners’ equity is duly received. Loans are being provided by South Africa’s Standard Bank and UK development finance institution British International Investment (BII).

Guarantees reach NOK 7 billion
Eksfin has been central to reducing risk throughout Scatec’s international expansion since 2010. It has contributed a total of NOK 7 billion in guarantees for the company’s projects around the world, not only in South Africa but also in Egypt, Brazil, Malaysia, Pakistan, the Czech Republic, Honduras and Ukraine. Guarantees help to increase financial capacity for projects enabling Scatec to grow faster than would otherwise have been possible.

Financial risk reduction in the form of guarantees is often decisive for international solar power projects to go ahead. Eksfin has helped to provide guarantees ensuring Scatec delivers as contracted, while also providing loans to the companies that have purchased plants and guarantees ensuring loans will be serviced. Eksfin has also provided guarantees to various authorities, power grid operators and Scatec sub-suppliers.

With a significant organisation in place in Cape Town, Scatec has previously delivered six large power plants in South Africa with total capacity of 448 MW. The current solar/battery project involves total CAPEX of close to USD 1 billion and will significantly increase access to renewable energy in the country.