Photo by: Release by Scatec
Modular solar photovoltaic (PV) and battery energy storage offering Release by Scatec has signed a $100-million loan agreement with the International Finance Corporation (IFC) as part of a larger partnership to provide a simpler, more affordable, and cleaner offering of power to African utilities.
The loan 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 explains.
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.
The 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 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 PV 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,” says IFC infrastructure and natural resources regional director Sarvesh Suri.
He adds the IFC’s ambition is to deploy a 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.
“The liquidity guarantee facility granted by the World Bank to Société Nationale d'Electricité underlines the strong commitment of the World Bank Group, of which the IFC forms part, to facilitating partnerships with private investors,” says Chad Hydrocarbons and Energy Minister Alixe Naïmbaye.
“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,” adds Scatec CEO Terje Pilskog, who is the chairperson of Release.
Release CEO Hans Kvalvaag comments that 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.”