Norwegian state-backed credit agency Eksfin is providing US$102 million in guarantees for three co-located energy storage projects in South Africa from renewable energy developer Scatec.
As Energy-Storage.news has previously reported, Scatec is delivering three projects in the Kenhardt region totalling 540MW of solar PV and 225MW/1,140MWh of energy storage, with construction starting at the end of July.
Export Finance Norway, or Eksfin, is providing a total financial risk reduction package of 1.2 billion NOK (US$102 million) for the project, which covers about 10% of the total project costs according to previous reports. 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% 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 be also be the long-term operations and maintenance (O&M) and asset management service provider.
Thee three projects – Kenhardt 1, 2 and 3 – are targeting grid connection by the end of 2022 and 20-year power purchase agreements for the dispatchable energy were signed back in June this year.
