Norwegian renewable energy developer Scatec is reducing its presence in sub-Saharan Africa by selling stakes in three South African renewable energy projects.
This move comes after the company recently sold a plant in Rwanda and divested from operations in Mozambique.
In the last week of July 2024, Scatec divested its indirect interests in hydropower plants located in Uganda, Malawi, and at the border of Rwanda, the Democratic Republic of Congo (DRC), and Burundi.
This follows the ongoing sale of its equity in the Kalkbult and Linde solar power plants in South Africa’s Northern Cape, as well as the Dreunberg plant in the Eastern Cape province, totaling 190 MW in capacity.
The company previously exited its entire interest and ceased operations, maintenance, and asset management at the 8.5 MW grid-connected Rwamagana solar plant in Rwanda.
Additionally, Scatec’s sell-offs in Uganda, Malawi, the DRC, and Burundi include its operating stake in the 255 MW Bujagali hydropower plant in Uganda, a development portfolio with the 361 MW Mpatamanga project in Malawi, and the 206 MW Ruzizi III project on the border of Rwanda, the DRC, and Burundi.
“We continue to deliver on our strategy to consolidate our portfolio through divesting assets in non-core markets and recycling capital into new investments in renewable energy,” Scatec stated in a release.
The ongoing sale of equity stakes in the three South African power plants is valued at $50 million. Scatec currently holds approximately 46% in Kalkbult and 44% in both the Linde and Dreunberg solar power plants.
The transaction will proceed in two phases, with Scatec reducing its stakes to around 13% in Kalkbult and 12% in Linde and Dreunberg. Scatec has signed an agreement with Greenstreet 1 Proprietary Limited, a subsidiary of STANLIB Infrastructure Fund II, managed by STANLIB Asset Management Proprietary Limited.
The first phase is expected to close in the second half of 2024, with the second phase closing in the first half of 2025.
Completion of the deal is subject to customary consents, including approvals from lenders, shareholders, and regulatory authorities.
Scatec’s initial step in reducing its presence in sub-Saharan Africa was the sale of its 52.5% equity share in the 40 MW Mocuba solar power plant in Mozambique to British power developer Globeleq in July 2023, a transaction that generated $8.5 million.
As Scatec exits sub-Saharan Africa, the company is redirecting its focus toward Egypt. Over the past six months, Scatec has secured deals for a 1,000 MW solar project with 200 MW of battery storage and land for a 5,000 MW wind farm in Egypt.
The company is also planning substantial investments in hydrogen projects in the country, with a senior vice president dedicated to this area.
While Scatec has executive vice presidents for Asia and Europe, it has no equivalent leadership focused on sub-Saharan Africa, underscoring its shift in strategic priorities.
