Norfund to invest up to US$33 million in South African PV

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Norfund has agreed to take up to 21% equity in all of the successful projects bid for by Scatec Solar. The fund had already committed NOK 80 million for Scatec’s initial 75 MW plant, a successful bidder in the first round of the South African government’s Renewable Energy Independent Power Producer Procurement Programme.

And with Scatec a preferred bidder on 75 MW and 40 MW projects in round two of the scheme, and intending to bid for a further four projects totaling 148 MW in round three, that investment could grow significantly.

"We are very pleased to have Norfund as a co-investor in our first project in South Africa," said Alf Bjørseth, chairman of Scatec Solar. "Solar energy has very low operating costs compared with most other sources of energy, but requires in turn large investments up front. Access to capital at reasonable terms is essential to develop and implement profitable solar projects."

Norfund plays an important role both through its direct investment, but also by opening the door for other partners and funding sources. The first 75 MW plant is expected to generate 145 million kWh annually – enough to power more than 35,000 households – and all the successful projects will sell power to South African electricity provider Eskom through 20-year power purchase agreements.

"It is gratifying that a Norwegian company like Scatec Solar now experiences a breakthrough in renewable energy in South Africa," said Norfund CEO Kjell Roland.

Solar power, as part of the essential infrastructure will be very important for the development of the region, and it shows that it is possible to combine environmental goals with economic growth and poverty reduction. Scatec announced in June that it would be investing in a range of PV projects along with IFC Infraventures in countries including Benin, Burkina Faso, Cameroon, Niger and Togo.