Renewable energy company Scatec has signed an agreement with asset management company Stanlib Infrastructure Fund to sell its 42% equity share in the 258 MW Upington solar power plant for R979-million.

“The transaction is in line with our strategy to optimise our portfolio and will release capital for new investments in renewable energy. We are very pleased to secure a value-accretive transaction and are confident that Stanlib will be a solid owner of the asset going forward,” says Scatec CEO Terje Pilskog.

“Scatec's work in the region is aimed at expediting investment and the establishment of renewable energy solutions globally and locally. This transaction strenghthens our local and regional position and, with the capital raised, we will be able to support and further drive our ambitions and projects in South Africa and the broader sub-Saharan Africa region,” says Scatec sub-Saharan Africa executive VP Jan Fourie.

The solar plants in Upington were awarded in the fourth bidding round under the Renewable Energy Independent Power Producer Procurement Programme and reached commercial operation in 2020. The plant generates about one-third of the proportionate power production earnings before interest, taxes, depreciation and amortisation in South Africa for Scatec.

Scatec will continue to provide operations and maintenance and asset management services to the Upington power plants.

“We entered South Africa in 2010 and have since grown into a leading renewable energy player in the country. South Africa remains a focus market for us and we will continue to build scale through new investments, including the Kenhardt project under construction and the new Grootfontein project secured in the fifth bidding round,” adds Pilskog.

“The transaction with a reputable South African partner such as Stanlib demonstrates a maturity for the South African renewable energy industry and also supports our ambitions to invest in South Africa’s future and move the country’s energy and climate goals forward,” says Fourie.

“Our asset management and sustainability teams will continue to invest in skills development, career development and small and medium-sized business opportunities in the broader Upington region. We will also continue our local partnerships that help us make a difference in surrounding communities.”