Scatec signs an agreement with Climate Fund Managers (CFM) to raise $102 million (NOK 1 billion) in financing and accelerate its growth ambitions. Release, created by Scatec ASA in 2019, offers a flexible rental solution for pre-assembled, modular solar and battery equipment for the mining and utility markets.
Scatec and CFM boost Release: accelerated growth ambitions in emerging markets
CFM, backed by FMO, the Dutch development bank, and Sanlam Infraworks, a South African group, is investing in Release through its Climate Investor One (CIO) fund, which focuses on renewable energy infrastructure in emerging markets. CFM contributes $55 million in equity, giving it a 32% stake in Release. Scatec, a leader in renewable energies in emerging markets, retains the majority of shares, i.e. 68%. CFM also grants shareholder loans totalling $47 million, part of which is on preferential terms.
Scatec CEO Terje Pilskog, who is also Chairman of Release, is delighted to be joining forces with Climate Fund Managers to boost the growth potential of the Release platform. He emphasizes that Release offers a unique renewable energy solution in a booming market, requiring a different business model to that of Scatec’s large-scale projects.
Following this transaction, Release will become a strong, independent company, while Scatec will remain the main shareholder and support Release to foster synergies in the next phase of development.
Scatec propulse Release: a flexible leasing model for renewable energy booming on the African market
Release is enjoying strong market momentum, particularly with African utilities. It operates projects in progress and under construction in Cameroon, South Africa, Mexico and South Sudan, with a total capacity of 47 MW in photovoltaic solar energy and 20 MWh in battery storage. It also signed additional contracts for 35 MW of solar photovoltaic power and 20 MWh of storage in Chad, while advancing its project pipeline.
Release CEO Hans Olav Kvalvaag welcomes CFM as a strong partner who shares the vision and aspirations of the company’s business concept. The new shareholder financing will be supplemented by additional debt and guarantee facilities, currently in advanced negotiations. This will enable Release to provide a solid financial base to meet the strong demand for its flexible leasing model, designed to easily deploy renewable power plants.
CFM’s commitment to the climate: a promising partnership with Scatec
Andrew Johnstone, CEO of CFM, says that CFM’s mission is to help put an end to the climate crisis. They do this by raising and deploying state-of-the-art mixed-finance funds on a large scale and at a sustained pace. CFM’s blended financing model incorporates impact financing into the deal structure, which Release will be able to leverage to improve its cost structure for its battery storage and grid connection solutions, delivering even more competitive pricing and better value to its customers. CFM is delighted to support the Release team in deploying its essential climate technology across Africa, helping to significantly reduce emissions from the mining and utilities sectors.
Following completion of the transaction, Scatec will record Release as a joint venture investment in its accounts, generating an accounting gain of around $40 million in the consolidated financial statements at closing. The transaction is expected to close in the third quarter of 2023, subject to the usual conditions.
