May 13th, 2013 - Scatec Solar today signed the final agreements with South Africa's Department of Energy to build two more PV projects totaling 115MW under the second round of the South African Renewable Energy Independent Power Producer Program. The plant is geared for completion in October, almost two months ahead of plan.
"We are looking forward to realize two more PV projects as part of South Africa's renewable energy program", Raymond Carlsen, CEO of Scatec Solar said. "With the experience gained from the Kalkbult project, our experienced team and partners will be even better prepared to take on the challenges of these large undertakings. We have for more than three years been actively developing project opportunities in South Africa, and being able to realize our plans is of great satisfaction to us and will benefit both the regions and the local communities in which we operate", Mr. Carlsen said.
As was the case with the Kalkbult project, the two new projects have been developed by Scatec Solar through its South African joint-venture company Scatec Solar SA. The plants will be located at Linde in Northern Cape and Dreunberg in Eastern Cape, both sun drenched regions that boasts some of the best conditions for solar power anywhere in the world. Combined annual production will be in excess of 225 million kWh per year, enough to cover the electricity demand of 53,000 South African households. The power will be fed into the local grid and sold through a 20-year Power Purchase Agreement with the national utility company, Eskom. Harvesting solar power through these two plants represents CO2 abatements of almost 190 000 tons per year.
The capital investment for the two projects is in the range of € 300 million and will be financed through South Africa's largest commercial bank, Standard Bank. The consortium providing the equity finance consists of Scatec Solar as the largest majority owner, Standard Bank, Old Mutual Life Assurance Company, Norfund and Simacel.
The local value creation of the two projects will be substantial. The construction of the plant will provide significant local job opportunities in addition to utilizing local content to stimulate the nascent South African renewable industry. This is emphasized by numbers provided through the Kalkbult project where Scatec Solar and sub-contractors have recruited and trained more than 500 employees at different levels ranging from technical skills to finance and project management. In peak periods, more than 400 employees - the majority from the local community - are working at the construction site. 16% of the employees are women who participate in all activities from management and administration to construction activities.
A certain part of the revenue from the parks as well as the project dividends will be earmarked Socio Economic Development initiatives in the area around the project site. The primary focus will be on skills development, educational and health initiatives.