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Scatec Solar, a Norwegian solar company, and Norfund, the Norwegian investment fund for developing countries, has partnered with Electricidade de Mozambique (EDM), the Mozambican state-owned power company, to build a 40 MW solar plant in the Southern African country for $80 million.

As part of the partnership, Scatec Solar and Norfund have signed a 25-year power purchase agreement and a shareholder agreement with EDM, according to a statement released on Tuesday. The agreements were signed at a ceremony in Maputo on Monday in the presence of Letícia Klemens, the Mozambican Minister of Mineral Resources and Energy, Dr. Mateus Magala, Chairman & CEO of EDM, and Børge Brende, the Norwegian Minister of Foreign Affairs.

“This is an excellent example of how private public partnerships can deliver renewable energy and support further economic growth in Mozambique,” said Raymond Carlsen, Scatec Solar’s CEO. “EDM and the government of Mozambique have demonstrated strong leadership in taking this project forward and it paves the way for further investments in renewable energy in the country.”

The 40 MW plant, the first large-scale solar plant in Mozambique, will be located near the city of Mocuba in the Zambézia Province. 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.

Under shareholder agreement, Scatec Solar will own 52.5 percent of the plant; Norfund, 22.5 percent; and EDM 25 percent. The International Finance Corporation (IFC) and the Emerging Africa Infrastructure Fund will provide project finance debt. The parties are targeting financial close and the commencement of solar plant construction in the first quarter of 2017.

“Access to reliable energy is a prerequisite for development. Only 3 percent of the world’s electricity is generated in Africa, although 15 percent of the world’s population lives here,” said Kjell Roland, Norfund CEO. “Clean energy is a focus investment area for Norfund, and we appreciate being a partner in this first independent solar power producer project in Mozambique together with EDM and 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 this year, Scatec Solar signed an agreement to develop a 100 MW solar power plant in Dutse, Jigawa State.