Scatec announces South Africa projects

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With South African utility Eskom having stated in November it cannot connect any more independent power projects because of grid constraints, the announcement this morning that Norwegian developer Scatec Solar has been awarded 258 MW of contracts in the latest round of bidding indicates progress may have been made.

The results of round four of the national Renewable Energy Independent Power Producer Procurement Program (REIPPPP) had been delayed for months after Eskom’s announcement last year, at which point the grid problems had reportedly delayed financial close on 17 round three projects with a total capacity of 1.473 GW.

This morning (Monday), Scatec Solar announced it will be augmenting its existing 427 MW of plants operating and under construction in South Africa with a further 258 MW from three adjacent projects at Upington, in the Northern Cape, which together, Scatec CEO Raymond Carlsen says, will be "one of the largest solar parks ever realized."

Community development projects

The Upington projects will be 42 per cent owned by Scatec and 18 per cent owned by the Norwegian overseas development fund Norfund. The remaining 40 per cent will be held by a trust which will channel dividends from the Upington projects into nearby community initiatives.

Unsurprisingly, the Scatec Solar announcement offers no explanation of how Eskom’s grid constraints have been overcome nor of the fate of the delayed projects from round three of the REIPPPP and it may be that, with Scatec claiming to have the largest solar asset base in South Africa, the Norwegian developer was able to push through its fourth round bid.

The Scatec announcement said financial close on the Upington projects is expected later in the year with the original deadline on July 31 and no information on whether that date has been extended.

Scatec says construction of the projects will start by early 2017.