Scatec has signed a $100 million loan agreement with the
World Bank’s International Finance Corporation (IFC). The loan agreement is
part of a larger partnership to provide a simpler, more affordable, and cleaner
offering of power to African utilities, which also includes a $ 65 million
guarantee facility to support the payment obligations of Release’s customers.
The objective is to replace costly diesel and expand
electrification in the region.
Release operates on a unique leasing model, providing flexible
short- or long-term contracts for the mining and utilities market, primarily in
Africa, based on modular, movable and redeployable equipment.
IFC is the largest global development institution renowned
for its instrumental role in supporting private sector development, and the
loan from IFC will provide funding on a portfolio level for Release’s further
development and installation of assets to be leased to African utilities.
The purpose of the guarantee facility is to guarantee
payments to Release from the counterparties leasing the solar and battery
equipment. The structure provides risk mitigation for Release while allowing
African utilities and governments to secure affordable renewable energy from
solar and batteries, without the financial commitment required for the
conventional infrastructure projects. The partnership with IFC will thereby
represent a significant catalyst for further growth of the Release platform.
The first project where the combined project loan and
guarantee structure will be applied is for a 35 MW solar and 20 MWh battery
project in N’djamena in Chad, where a lease contract has already been signed.
Release’s existing and operating projects in Northern Cameroon of 36 MW of
solar PV and 20 MWh of batteries will also form part of the portfolio financing
and discussions on extending the capacity of these projects are currently
ongoing with the utility.
“This highly innovative solution enables countries to deploy
solar power projects quickly, allowing African countries to swiftly ramp up to
meet rising energy demand with clean power solutions,” said IFC’s Regional
Industry Director for Infrastructure and Natural Resources, Africa,'Sarvesh
Suri.
“Our ambition is to deploy this replicable solution, in
partnership with Release in multiple countries across sub-Saharan Africa within
a short timeframe, allowing more people to benefit from the economic growth that
comes with reliable, affordable access to electricity.”
“I am delighted that, through this partnership between Scatec
and IFC, Chad has been chosen as the first country to benefit from a solar
power plant to support the government’s efforts to meet the energy access needs
of our populations,” said Alixe Naïmbaye, Minister of Hydrocarbons and Energy
of Chad. “In addition, the liquidity
guarantee facility granted by the World Bank to Société Nationale d’Electricité
underlines the strong commitment of the World Bank Group to facilitating
partnerships with private investors.”
“We are excited to secure the partnership with IFC for our
innovative solar leasing solution Release. IFC’s support is testimony to the
solid business model of Release, the general demand and need for such an
innovative solution in the market and our proven track record in developing
renewable energy solutions,” says Scatec Chief Executive, Terje Pilskog, who is
also Chair of Release.
“The innovative approach of Release follows a dynamic rolling
delivery model of build, connect, and deliver. Looking ahead, Release is
actively exploring additional opportunities in Cameroon, Liberia, and the rest
of West- and Central-Africa, reinforcing its commitment to advancing renewable
energy solutions across the African continent and other select markets,” says
Release Chief Executive, Hans Olav Kvalvaag.
This significant step comes after Release recently raised $
102 million in funding from Climate Investor One, a fund managed by Climate
Fund Managers, a leading climate-centric blended finance fund manager backed by
FMO, the Dutch Development Bank, and Sanlam Infraworks, part of the Sanlam
Group of South Africa.
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