Business World of Renewable Energy

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Scatec Solar Closes Financing for Mozambique's First Large Scale Solar Plant

Oslo, Norway - 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.

According to Scatec Solar, 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 Zamb├ęzia Province. The plant will deliver power to the national grid and produce enough energy to serve about 175,000 households, Scatec points out.

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.

"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."

Source: IWR Online, 15 Mar 2018