Scatec Solar closes financing for Mozambique's first large scale solar plant
March 6, 2018: Scatec Solar, KLP Norfund Investments and Electricidade de
Mozambique (EDM) have closed debt financing and initiated construction of a 40
MW solar plant in Mozambique. The project debt financing is provided by IFC, the
International Finance Corporation, a member of the World Bank Group, and the
Emerging Africa Infrastructure Fund.
This is the first large scale solar plant to be built in the country and
represents an important step in realizing Mozambique's ambition to increase
renewable power generation in its energy mix.
The partners signed a Power Purchase Agreement (PPA) for the solar plant in
October 2016. The PPA secures the sale of power from the plant over a 25-year
period to the state-owned utility Electricidade de Mozambique (EDM).
The 40 MW plant is located close to the city of Mocuba in the Zambézia Province,
and is expected to deliver 79,000 MWh per year of much needed electricity to the
northern regions of Mozambique. The plant will deliver power to the national
grid and produce enough energy to serve about 175,000 households.
The project costs are estimated at US$ 76 million, funded through equity of US$
14 million, a grant of US$ 7million and project debt of US$ 55 million. Equity
partners are Scatec Solar (52.5%), KLP Norfund Investments (22.5%) and EDM
(25%). Scatec Solar will deliver Engineering, Procurement and Construction (EPC)
services, as well as Operation and Maintenance (O&M) and Asset Management
services to the power plant.
IFC provided project debt of US$ 19 million on its own account together with a
concessional loan from the Climate Investment Fund of the same size and a
syndicated loan of US$ 17 million from the Emerging Africa Infrastructure Fund
(EAIF), managed by Investec Asset Management, which is part of the Private
Infrastructure Development Group (PIDG). In addition, EAIF is directly providing
a US$7 million Viability Gap Funding grant for the project raised from the
Technical Assistance Fund of the PIDG.
"EDM is very pleased that the Mocuba Solar IPP project has reached financial
close through a well-structured public-private partnership between EDM, Scatec
Solar and Norfund, and with excellent support from IFC and EAIF as lenders, as
well as the Government of Norway", says EDM's Chairman and CEO, Dr Mateus
Magala. "Experiences gained with the Mocuba project is invaluable in shaping
Mozambique's renewable energy future."
"Closing debt financing for the Mocuba solar power plant is another great
achievement for Scatec Solar and our partners", says Scatec Solar CEO, Raymond
Carlsen.
"Norfund appreciates being a partner in this first solar power project in
Mozambique. Access to reliable energy is a prerequisite for development. Clean
energy is therefore a focus investment area for us", says Norfund Executive Vice
President, Mark Davis.
Oumar Seydi, IFC Director for Sub-Saharan Africa, said: "IFC is committed to
bridging Africa's infrastructure gap while promoting clean energy. This project
is in one of the least developed provinces of Mozambique. It will diversify the
country's power generation mix and help increase access to electricity. By
supporting projects like Mocuba, IFC, EAIF and PIDG are helping to encourage the
participation of other private investors in Mozambique's power sector."
Nazmeera Moola, Head of EAIF at Investec Asset Management, said: "Renewable
energy and affordable energy is a key area of growth for the Emerging Africa
Infrastructure Fund and PIDG. By supporting this project, EAIF was able to make
the project bankable by providing long tenors. Furthermore, by facilitating a
VGF grant from the Technical Assistance Fund of the PIDG, the PIDG group was
able to contribute to reducing the cost of electricity for Mozambique."
Scatec Solar is a leading developer and owner of large scale solar in emerging
markets.
For further information, please contact:
Scatec Solar:
Mr. Raymond Carlsen, CEO, tel:
+47 454 11 280 raymond.carlsen@scatecsolar.com
Mr. Mikkel Tørud, CFO, tel:
+47 976 99 144 mikkel.torud@scatecsolar.com
About Scatec Solar
Scatec Solar is an integrated independent solar power producer, delivering
affordable, rapidly deployable and sustainable source of clean energy worldwide.
A long term player, Scatec Solar develops, builds, owns, operates and maintains
solar power plants, and already has an installation track record of 1,000 MW.
Currently, the company is producing electricity from 322 MW of solar power
plants in the Czech Republic, South Africa, Rwanda, Honduras and Jordan and
another 434 MW are under construction.
With an established global presence, the company is growing briskly with a
project backlog and pipeline of more than 1.5 GW under development in the
Americas, Africa, Asia and the Middle East. Scatec Solar is headquartered in
Oslo, Norway