Scatec Solar starts work on 40-MW solar park in Mozambique after financing close

Norway's Scatec Solar ASA (OSL:SSO) said today that, along with its project partners, it has closed financing and started construction of a 40-MW solar park in Mozambique, the country's first large-scale solar plant.

Scatec Solar holds 52.5% in the project, while KLP Norfund Investments and Electricidade de Mozambique (EDM) own 22.5% and 25%, respectively. The USD-76-million (EUR 62m) facility is funded via USD 14 million of equity, a USD-7-million grant, and project debt of USD 55 million, provided by the International Finance Corporation (IFC) and the Emerging Africa Infrastructure Fund (EAIF). IFC provided USD 19 million on its own account in combination with a USD-19-million concessional loan from the Climate Investment Fund and a syndicated loan of USD 17 million from EAIF, managed by Investec Asset Management, which is part of the Private Infrastructure Development Group (PIDG). EAIF is also providing a USD-7-million viability gap funding grant secured from the Technical Assistance Fund of the PIDG.

Under a power purchase agreement (PPA), signed in October 2016, the plant will sell power to state-owned utility EDM over a 25-year period. IFC announced a financing commitment for the project in June last year.

The solar plant is located near the city of Mocuba in the Zambezia Province, and will deliver "much needed" electricity to the northern parts of the country. It is expected to generate enough power for about 175,000 households.

"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," said EDM's chairman and chief executive Mateus Magala.

Scatec Solar will provide engineering, procurement and construction (EPC), operation and maintenance (O&M) and asset management services for the plant.

(USD 1 = EUR 0.810)

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