Scatec reaches financial close for battery energy storage project in South Africa
Standard Bank the lead arranger for the groundbreaking Mogobe BESS project.
Scatec, a leading renewable energy provider, has reached financial close for the Mogobe battery energy storage system (BESS) facility totaling 103 MW / 412 MWh and is now making final preparations to start construction of the project.
Mogobe BESS 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. As part of the PPA, Scatec will receive payments for making the storage capacity available for the National Transmission Company of South Africa (NTCSA) which will utilise the capacity to balance the grid.
The estimated total capex for the battery energy storage project is ZAR 3.0 billion ($170 million) of which Scatec’s engineering, procurement, and construction (EPC) contracts account for approximately 83%. The project will be financed by ZAR 2.7 billion ($154 million) of non-recourse project debt, with Standard Bank as mandated lead arranger, and the remaining by equity from the owners.
Scatec will hold 51% of the equity in the project, with Perpetua Mogobe owning 46.5%, and the remaining 2.5% held by a company representing the Mogobe Local Community Trust. Scatec will be the EPC provider and provide operations and maintenance, as well as asset management services to the project.
“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,” says Scatec CEO Terje Pilskog.
“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,” adds Roar Haugland, EVP Sub-Saharan Africa, Scatec.
“Standard Bank is proud to continue our long-standing partnership with Scatec as the lead arranger for the groundbreaking Mogobe BESS project. 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,” says Rentia van Tonder, Head: Power – Corporate and Investment Banking, Standard Bank of South Africa.