Scatec ASA

Summary

Scatec ASA, together with its subsidiaries, operates as a renewable power producer worldwide. The company operates through Power Production; Services; and Development and Construction segments. It develops, builds, owns, and operates solar, wind, and hydro power plants and storage solutions. The company is also involved in the engineering, procurement, construction, operation, maintenance, and asset management of power plants. It has a total of 15 GW in operation and under construction. The company was formerly known as Scatec Solar ASA and changed its name to Scatec ASA in November 2020. Scatec ASA was incorporated in 2007 and is headquartered in Oslo, Norway.

Strategy

Scatec will continue to grow its renewables business, including solar, wind and hydro, by building scale in selected focus markets to improve predictability and value creation.

Scatec will build on its core strengths to take a leadership role in green hydrogen by developing prime locations in emerging markets, secure long-term offtake, and funding, and applying the integrated business model

Scatec will optimise its portfolio by simplifying and consolidating, capturing additional value in power markets, and scaling and launching Release as an independent platform.

Scatec's Focus Markets

Targets

Scatec targets to invest NOK 10 billion of equity into new power plants towards 2027 that generate long-term profitable returns of 1.2 times the cost of project equity.

Selling-off Non-product Assets

Oslo, 18 July 2023: Scatec ASA, a leading renewable energy company in emerging markets, has today signed an agreement with Globeleq to sell its 52.5% equity share in the 40 MW Mocuba solar power plant in Mozambique for USD 8.5 million (NOK 85 million), in line with the company’s strategy.

This transaction is in line with Scatec's strategy to optimise their portfolio, which includes the divestment of smaller assets in non-focus markets.

The project has an annual production of approximately 75 GWh and holds a 25-year PPA with the state-owned utility, EDM. As part of the transaction, Globeleq will assume responsibility for operations & maintenance and asset management services for the power plant.

The transaction is expected to generate a net accounting gain of approximately USD 4 million on a consolidated basis and USD 3 million on a proportionate basis. The final accounting effects will be determined on closing of the transaction. The transaction is subject to the customary consents and is expected to close in the first half of 2024.

New Contracts

As of August 2023 Scatec has reached financial close for its three Grootfontein solar projects in South Africa, won as part of the Department of Mineral Resources’ fifth bidding round of its Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) in 2021.

With a total capacity of 273 MW solar power. Once operational the projects will deliver much needed renewable energy under a 20-year Power Purchase Agreement. The project will start construction next year and achieving commercial operation in 2025.

The power plants have an estimated total project cost of ZAR 5.1 billion (USD 270 million) of which Scatec’s EPC contracts account for approximately 75%. The project will be financed by equity from the owners and ZAR 4.5 billion (USD 241 million) of non-recourse project finance debt provided by Standard Bank of South Africa as mandated lead arranger.  

Scatec will own 51% of the equity in the project, with H1 Holdings, our local Black Economic Empowerment partner owning 46.5% and the Grootfontein Local Community Trust 2.5%. Scatec will be the Engineering, Procurement and Construction (EPC) provider and provide Operation & Maintenance as well as Asset Management services to the power plants. Construction start is expected during the first quarter of 2024.

Release by Scatec

Release is one of Scatec's subsidiaries. It offers a unique renewable energy solution in a rapidly growing market segment that requires a different business model than Scatec’s larger scale project business.

Oslo 19 July 2023: Release by Scatec (“Release”) signed an agreement to raise USD 102 million (NOK 1 billion) in funding from Climate Fund Managers (“CFM” blended finance fund manager, renewable energy infrastructure in emerging markets.) to further accelerate its growth ambitions. Release was established by Scatec ASA (“Scatec”) in 2019 to offer a flexible leasing solution of pre-assembled and modular solar and battery equipment for the mining and utilities market.  

In this deal, CFM will contribute USD 55 million in equity for a 32% stake in Release. CFM will also provide shareholder loans totalling USD 47 million, part of which will be on concessional terms. While Scatec will retain the majority shareholding of 68%  

Green Bond Issuance

On the 10th of February 2023 Scatec ASA placed NOK 1,000 million of new senior unsecured green bonds to refinance the remaining USD 93 million of the bridge facility established when Scatec acquired SN Power in 2021.

The new bonds have maturity in February 2027 and will have a coupon of 3 months NIBOR plus 660 bps. The weighted average margin and tenor on Scatec’s group level debt portfolio including the new bonds are 3.25 percent and 3.5 years respectively. Although these bonds carry no credit rating Scatec has already completed a successful bond issuance in 2017.

With this bond transaction Scatec ASA has completed the refinancing of the bridge facility established when Scatec acquired SN Power in 2021.