news - FMO invests in first utility scale solar project in Rwanda

FMO has arranged the Senior Debt package for the construction of a 8.5 MW PV solar park in Rwanda. The project, which has been developed by Gigawatt Global, will be the first utility scale PV project to be realized in Eastern Africa and will contribute significantly towards the Rwanda government’s objective to significantly increase the country’s electricity generation capacity.

The PV plant will be located 60 km from the capital of Kigali on land belonging to the Agahozo-Shalom Youth Village (ASYV), a residential and educational community and farm that provides a safe and secure living environment and education for youth orphaned during and after the genocide in 1994. The area is well suited for solar energy generation and annual production from the plant is estimated at 16 million kWh per year. The electricity will be fed into the national grid under a 25 year power purchase agreement with the Rwanda Energy, Water and Sanitation Authority (EWSA). Construction will start immediately and commercial operation of the park is expected by this summer.

The capital investment for the project is in the range of $ 23 million and will be financed through FMO, the Dutch Development Bank, the Emerging Africa Infrastructure Fund and and Norfund, all three institutions with long experience from investing in developing countries including Rwanda. Scatec Solar and Norfund will be majority owners in the solar park with Gigawatt Global maintaining a 20 % share in the project.

"We are very happy to be able to realize this first utility scale PV project in Rwanda", Raymond Carlsen, CEO of Scatec Solar said. "At the end of last year, we grid connected the first utility scale solar park in Southern Africa. The 75 MW Kalkbult solar park is currently the largest in Africa. Our objective has been to bring the experience gained in South Africa to other African nations, and we are pleased to team up with Norfund, FMO and EAIF and introduce large scale solar energy to Eastern Africa. The PPA with EWSA was signed in July 2013 and the PV plant will be operational by July 2014, so through this project we will demonstrate that with the combined efforts of experienced partners and national authorities, solar energy is fast and cost effective to build", Mr. Carlsen said.

"FMO is very proud to have arranged the Senior Debt package for this true frontier transaction with such large development impact, providing renewable energy to a country with urgent electricity needs", Linda Broekhuizen, CIO of FMO says. "Also in terms of fast execution this project is remarkable, as we rarely see energy projects coming into the construction phase so fast".

With limited power generation capacity, the Rwanda Government has introduced an aggressive plan to boost the nation’s generation capacity. The objective is for 50 % of the population to have access to electricity by 2017 and the installed generation capacity increased to 1000 MW, up from merely 100 MW in 2011. In this context the 8.5 MW solar PV plant will be a substantial and clean power addition and the cost of electricity will be significantly lower than today’s heavy and costly reliance on diesel generation.

"An important goal for Norfund has been to increase investments in renewable energy in Sub-Saharan Africa, as well as broadening our portfolio to include more solar power", Kjell Roland, CEO of Norfund said. "We are therefore very happy that Scatec Solar wanted to utilize the experiences from South Africa in Rwanda, and we look forward to contribute to increased electricity supply in the country", Mr. Roland said. ASYV will benefit from the project in terms of revenues that will contribute to the village’s long-term funding. In addition, students will be able to use the facility for practical training.

More about Scatec Solar on www.scatecsolar.com

More about Norfund on www.norfund.no 

Contact: Mr Raymond Carlsen, CEO, Scatec Solar SA, tel + +27 7168 49 964 raymond.carlsen@scatecsolar.com

Mr. Sven Rost, VP Communications, tel: +47 932 53 196  sven.rost@scatec.no

About Scatec Solar

Scatec Solar is a leading, globally acting, independent solar energy provider, focusing on making solar power attractive and affordable to customers and investors worldwide. The company masters the complete downstream value chain of the PV business, including project development, finance, engineering, construction and operation and maintenance. The company is also an Independent Power Producer (IPP) through ownerships in a number of solar PV parks, all developed, built and operated by the company itself. Scatec Solar has a clear focus on large, utility scaled installations and the instinct to be a first mover in emerging PV markets. Headquartered in Oslo, Norway, the company is present in a number of countries and geographies and has a rapidly expanding track-record of more than 300 MW PV installations in regions with excellent solar irradiation and high return on investments. Our objective is to establish PV as a sustainable and lucrative source of energy all over the world For more on Scatec Solar, please visit the home page; www.scatecsolar.com  

About Norfund

Norfund (the Norwegian Investment Fund for Developing Countries) is owned by the Ministry of Foreign Affairs and serves as an instrument in Norwegian development assistance policy. The fund contributes to poverty reduction and economic development through investments in profitable businesses and transfer of knowledge and technology. The current investment portfolio of Norfund totals USD 1.6 billion invested in 117 different projects. For more on Norfund please visit the home page; www.norfund.no

About FMO

FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With an investment portfolio of EUR 6.3 billion, FMO is one of the largest European bilateral private sector development banks. www.fmo.nl