Construction set to commence on 103MW South Africa BESS project

Scatec ASA, a renewable energy provider, has reached financial close for the Mogobe battery energy storage system (BESS) facility in Northern Cape, South Africa

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

“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,” said Roar Haugland, EVP sub-Saharan Africa, Scatec. “By unlocking more grid capacity, we are enabling further electricity access, as well as enabling more renewable energy grid connections in years to come.”

A milestone for South Africa

With a total capex for the 103MW / 412MWh project at US$170mn, Scatec’s EPC contract account for approximately 83%. The project, which will see NTCSA utilise the capacity to balance the grid, will be financed by US$154mn of non-recourse project debt with Standard Bank of South Africa acting as mandated lead arranger, and the remaining equity from the owners.

“This marks a new milestone for Scatec in South Africa and for the renewable energy transition in the country,” commented Scatec CEO Terje Pilskog. “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.”

“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,” added Rentia van Tonder, head: power – corporate and investment banking, Standard Bank of South Africa.

This step towards a sustainable future for South Africa is a timely announcement given the recent warning from IRENA that the world is set to miss a key climate target without immediate change. Click here to discover the full story.