Scatec clinches preferred bidder status for R13bn solar cluster in Free State

Norway-based renewable energy group, Scatec ASA, has been awarded preferred bidder status for a R13 billion solar cluster project in in the Free State province, which will add a total of 846MW to the electricity grid.

In a statement on Wednesday, Scatec confirmed it had been awarded preferred bidder status in the seventh round of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

The project, known as the Kroonstad PV cluster, is expected to operate under 20-year Power Purchase Agreements (PPAs), ensuring a steady supply of sustainable energy once completed.

This latest development follows the Department of Electricity and Energy’s strategic re-allocation of energy capacity from onshore wind to solar photovoltaic (PV) solutions.

The cluster will comprise three solar power plants, Oslaagte Solar 2 (293MW), Oslaagte Solar 3 (293MW), and Leeuwspruit Solar (260MW).

The estimated total project cost for the solar cluster project is R13bn ($735 million). The projects will be financed with up to 90% non-recourse project debt and the remaining by equity from the owners.

Scatec CEO, Terje Pilskog, said South Africa was one of the group's core markets with the latest award the largest megawatt award to date in the country.

“It excites me to announce another important milestone for Scatec in South Africa and for the country’s renewable energy transition. The Kroonstad PV Cluster represents a significant addition to Scatec’s growing renewable energy footprint in Sub-Saharan Africa," Pilskog said.

"Being selected once again under the REIPPPP reaffirms our role as a trusted partner and a leading developer in the region. We commend the government’s continued commitment to enabling clean, secure, and affordable energy."

Scatec will own 50.90% of the equity in the project with Stanlib’s infrastructure fund (through its renewable energy platform, Greenstreet), along with Redstreet owning 46.50% and a Community Trust holding 2.6%.

Scatec will provide engineering, procurement, and construction (EPC), operations and maintenance, and asset management services to the project. Financial close is expected in 2026.

"We are now looking forward to reaching financial close and start construction of the PV cluster during 2026,” said Alberto Gambacorta, Scatec's executive vice-president and general manager for Sub-Saharan Africa.  

The group in December announced it had officially started producing and supplying electricity to the national grid from the three Kenhardt plants in the Northern Cape.

The Kenhardt project, one of the world’s first and largest hybrid solar and battery storage facilities, has an installed solar capacity of 540MW and a battery storage capacity of 225MW/1 140MWh.

Scatec said the project delivers 150MW of dispatchable power from 5am to 9.30pm year-round to the national grid under a 20-year Power Purchase Agreement with Eskom.

The group is also in an advanced stage of the three Grootfontein solar projects won as part of the Department of Mineral Resources’ fifth bidding round of its REIPPPP in 2021.

The solar power plants will be the first Scatec assets located in the Western Cape province of the country and have a total capacity of 273MW solar power.

Once operational the projects will deliver much needed renewable energy under a 20-year Power Purchase Agreement. The three solar plants will lead to a combined abatement of 630 000 tons of CO2 emissions annually.

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