IFC provides $55 million financing for Scatec Solar in Mozambique

07 Jun 2017, 12:00 am
Financial Nigeria

Summary

Scatec Solar is a leading developer and owner of large-scale solar plants in Africa, with operations in South Africa, Rwanda, Mali, Kenya and Nigeria.

The International Finance Corporation announced today that it has agreed to provide a $55 million financing to Scatec Solar, a Norwegian solar company, to develop a 40.5 MW solar plant in Mocuba, Mozambique.

The Washington-based multilateral lender said the solar plant will be Mozambique’s first utility-scale solar PV plant, which will help increase electricity sector climate resilience and deliver power to rural areas.

When completed, the plant is expected to deliver 77,000 MWh per year of electricity to the northern regions of the country. The plant will also deliver power to the national grid, serving about 175,000 households.

“Our investment in Mozambique’s first utility scale solar power plant reaffirms IFC’s commitment to renewable energy in emerging markets,” said Jumoke Jagun-Dokunmu, IFC’s Country Manager for Mozambique. “There is limited access to electricity in Mozambique, particularly in rural areas. This investment will expand electricity supply in one of the least developed regions of the country while also supporting electricity infrastructure and promoting foreign direct investments at an important time.”

The IFC financing package consists of $19 million from the lender’s own account, $19 million from Climate Investment Funds, and a syndicated loan of up to $17 million.

More funds are also being mobilized from Emerging Africa Infrastructure Fund, which provides debt products to private sector infrastructure projects in Sub-Saharan Africa. The project will receive a $7 million Viability Gap Funding grant from the Technical Assistance Fund of the Private Infrastructure Development Group, a multi-donor funded institution that encourages private investment in infrastructure in emerging markets. The entire project is expected to cost about $80 million.

The project is being developed by Scatec Solar in partnership with Norfund, Norway’s development finance agency, and Electricidade de Moçambique (EdM), Mozambique’s national electricity company. EdM has signed a 25-year power purchase agreement with Scatec Solar.

Headquartered in Oslo, Scatec Solar is a leading developer and owner of large-scale solar plants in Africa, with operations in South Africa, Rwanda, Mali, Kenya and Nigeria. In August last year, Scatec Solar signed an agreement to develop a 100 MW solar power plant in Jigawa State, Nigeria at a total cost of $150 million.

“Scatec Solar is committed to harnessing Mozambique’s solar potential and infusing grid stability,” said Raymond Carlsen, CEO, Scatec Solar. “This is especially important for a country that relies on a long distance power transmission system that is vulnerable to interruptions. We will leverage IFC’s knowledge and support to ensure greater resilience for the country’s electricity sector.”


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