Scatec ASA has been awarded preferred bidder status for an 846-megawatt solar cluster under the seventh round of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). This project, located in the Free State province, follows the reallocation of part of the capacity initially intended for wind power to solar photovoltaics in this bidding round.
Composition and financing of the solar cluster
The Kroonstad cluster will consist of three solar power plants: Oslaagte Solar 2 (293 MW), Oslaagte Solar 3 (293 MW), and Leeuwspruit Solar (260 MW). The total project investment is estimated at ZAR13bn ($735mn). Its financing will rely on up to 90% non-recourse project debt, with the remainder funded by equity from the project owners.
Scatec will own 50.90% of the equity, while Stanlib’s infrastructure fund via its Greenstreet platform, along with Redstreet, will hold 46.50%. A Community Trust will also hold 2.6%. Scatec will provide engineering, procurement, and construction (EPC), as well as operations and maintenance (O&M) services for the cluster.
Contract duration and implementation expectations
The three plants will operate under twenty-year power purchase agreements (PPAs), securing long-term energy supply. The project is set to bolster South Africa’s solar generation capacity in line with its national goals to diversify its energy mix.
Financial close is expected by 2026, paving the way for the start of construction later that year. Scatec draws on its significant regional experience in renewable energy, with several references across the African continent.
The ownership structure reflects the trend of consortiums blending international investors, local players, and community initiatives. This model aims to ensure governance that complies with South African authorities’ requirements for local participation in strategic energy infrastructure.
The substantial use of non-recourse debt for financing, along with the twenty-year contractual commitment, positions the project as one of the key investments in Southern Africa’s power sector. Markets are closely monitoring the project’s financial close and its implementation timeline.
