Scatec ASA signs PPA for new 142MW solar plant in Brazil with Statkraft

Scatec ASA, a prominent renewable energy solutions provider, has entered into a 10-year power purchase agreement (PPA) with Statkraft Energia do Brasil Ltda. This agreement marks a significant step forward for Scatec’s operations in Brazil, focusing on a new 142 megawatt (MW) solar plant located in Minas Gerais. The deal highlights a major commitment to expanding sustainable energy resources in Brazil, one of Scatec’s key markets.

Under the terms of the PPA, approximately 75% of the expected power generated by the new solar facility will be sold to Statkraft Energia do Brasil Ltda. The remainder of the power will be available for sale through various short, medium, and long-term contracts. The project is expected to yield an equity return that surpasses Scatec’s benchmark hurdle rate, which is 1.2 times the project’s cost of equity.

The total capital expenditure for this solar plant is estimated at USD 94 million. Financing for the project includes non-recourse debt covering around 63% of the total cost, with the remaining funds provided through equity from Scatec. Additionally, discussions are underway with lenders to secure a debt facility of approximately EUR 15 million to support Scatec’s equity contribution.

The financial closure and commencement of construction are scheduled for the latter half of this year, with the solar plant expected to begin commercial operations by the end of 2025. This project is Scatec’s third solar venture in Brazil, bringing its total capacity in the country to 835 MW.

Scatec CEO Terje Pilskog expressed enthusiasm about the new project: “This is our first plant in the southeast submarket, diversifying and strengthening our portfolio in the country. Brazil is one of our focus markets, and we will continue to seek opportunities and push the green transition forward.”

Natasha Gaertner, VP of Statkraft Markets, also commented on the partnership: “We’re pleased to partner with Scatec on this significant project, reinforcing our commitment to Brazil’s sustainable energy future. This partnership reflects our shared vision for a greener tomorrow and our dedication to providing clean, reliable energy.”

Scatec will maintain 100% ownership of the solar plant until commercial operation is achieved, at which point they may seek equity partners to further enhance value creation. The company will also manage the engineering, procurement, and construction (EPC) aspects of the project, although it will retain a limited scope in these areas.

This new project underscores Scatec’s expanding footprint in the renewable energy sector in Brazil, complementing its existing 531 MW Mendubim solar plant in Rio Grande do Norte and the 162 MW Apodi solar plant in Ceara. These projects highlight Scatec’s commitment to contributing to Brazil’s renewable energy landscape and enhancing sustainable practices across the region.