Scatec gears up for construction of R3 billion Northern Cape battery project

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21-10-2024
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Diamond Fields Advertiser
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RENEWABLE power provider Scatec ASA has reached financial close for the R3 billion Mogobe battery energy storage system (BESS) facility near Kathu in the Northern Cape. The facility, which will have a capacity of 103 MW/412 MWh, is now in its final stages of preparation for construction.

The Mogobe BESS project was awarded a 15-year power purchase agreement (PPA) under the first bid window of the Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP) in South Africa. According to the PPA, Scatec will receive payments for making the storage capacity available to the National Transmission Company of South Africa (NTCSA) to balance the grid.

The project’s total estimated capital expenditure is R3 billion ($170 million), with Scatec’s engineering, procurement, and construction (EPC) contracts accounting for approximately 83%. The financing includes R2.7 billion ($154 million) in non-recourse project debt, arranged by the Standard Bank of South Africa, and the remainder by equity from the project owners.

Scatec will hold a 51% equity stake in the project, with Perpetua Mogobe (RF) (Pty) Ltd owning 46.5% and the Mogobe Local Community Trust holding 2.5%. Scatec will also serve as the EPC provider and oversee operations, maintenance, and asset management.

“This marks a new milestone for Scatec in South Africa and for the renewable energy transition in the country. The Mogobe BESS project is a first of a kind and reaffirms our standing as a leading renewable energy player in South Africa. We continue to see attractive growth opportunities in the market based on the need for growth in power generation, our strong position in the country and our strong and competent local team,” said Scatec CEO Terje Pilskog.

Drawing on the successes of the hybrid solar and battery storage projects at Kenhardt, also in the Northern Cape, Scatec is set to construct one of Africa’s first and largest standalone dispatchable BESS systems, strategically located near Kathu, close to high power demand centres.

“We are showing and supporting that dispatchable energy and grid infrastructure are cornerstones to the sustainability of South Africa’s current and future energy system. By unlocking more grid capacity, we are enabling further electricity access, as well as enabling more renewable energy grid connections in years to come,” added Roar Haugland, EVP Sub-Saharan Africa, Scatec.

Rentia van Tonder, head of power – Corporate and Investment Banking at Standard Bank of South Africa, also expressed pride in the continued partnership with Scatec.

“This facility represents a significant step forward in South Africa’s energy transition, building on our successful collaboration on projects like Kenhardt. We’re committed to financing innovative energy solutions that drive sustainable development and economic growth in South Africa and across the continent,” said Van Tonder.