Scatec ASA

Earnings Release • Oct 19, 2018

Third quarter

2018

About Scatec Solar

Scatec Solar is an integrated independent solar power producer, delivering affordable, rapidly deployable and sustainable source of clean energy worldwide. As a long-term player, Scatec Solar develops, builds, owns, operates and maintains solar power plants, and has an installation track record of 1,000 MW.

The company is producing electricity from 357 MW of solar power plants and holds another 1,057 MW under construction. With an established global presence, the company is growing briskly with a significant project backlog and pipeline under development in the Americas, Africa, Asia and the Middle East. Scatec Solar is headquartered in Oslo, Norway.

Asset portfolio 1)

Segment overview

Power Production

The plants produce electricity for sale under 20-25 year fixed priced contracts, normally with inflation adjustments, power purchase agreements or feed-in tariff schemes. The segment also comprise asset management services provided to solar power plants controlled by Scatec Solar.

Operation & Maintenance

The Operation & Maintenance segment comprises services provided to solar power plants controlled by Scatec Solar. Revenues are generated on the basis of fixed service fees with additional profit-sharing arrangements.

Development & Construction

The Development & Construction segment derives its revenues from the sale of development rights and construction services delivered to power plant companies controlled by Scatec Solar.

Corporate

Corporate consists of activities of corporate services, management and group finance.

1) Per reporting date.

2) Scatec Solar's share of the total estimated economic return from its subsidiaries. For projects under development the economic interest may be subject to change.

Q3'18 Highlights

• Q3'18 proportionate revenues of NOK 1,259 million and EBITDA of NOK 257 million
• D&C revenues of NOK 1,077 million and EBITDA of NOK 130 million – reflecting continued high construction activities with satisfactory margins
• Year to date cash distributions from operating assets of NOK 188 million
• Increased ownership in the three operating plants in South Africa
• 35 MW Los Prados plant in Honduras in commercial operation
• Secured 121 MW of new backlog projects in Ukraine

Proportionate revenues and EBITDA NOK MILLION

Key figures

NOK MILLION	Q3 2018	Q2 2018	Q3 2017	YTD 2018	YTD 2017
PROPORTIONATE FINANCIALS 1)
Revenues and other income	1,259	1,229	924	3,060	1,236
Power Production	155	150	141	442	413
Operation & Maintenance	22	30	20	66	54
Development & Construction	1,077	1,045	760	2,539	760
Corporate	4	4	3	12	9
EBITDA	257	266	500	632	687
Power Production	127	121	119	353	347
Operation & Maintenance (O&M)	11	19	9	32	24
Development & Construction (D&C)	130	140	384	286	351
Corporate	-11	-14	-11	-39	-35
Operating profit (EBIT)	200	226	461	497	566
Profit/(loss)	110	81	394	195	360
Net interest- bearing debt	3,093	2,512	1,839	3,093	1,839
Power production (GWh)	73	68	72	209	211
SSO proportionate share of cash flow to equity 2):	141	136	216	298	243
CONSOLIDATED FINANCIALS 3)
Revenues and other income	294	286	655	869	1,210
EBITDA	221	212	595	645	1,034

Basic earnings per Share (NOK) 0.13 0.93 3.71 0.88 3.73 Power Production (GWh) 155 144 157 457 460

1) See Other definitions appendix for definition.

2) See Alternative Performance Measures appendix for definition.

3) See Note 2 Operating Segments in Condensed interim financial information for reconciliation between proportionate and consolidated financials.

NOK MILLION	Q3'18	Q2'18	Q3'17	YTD 2018	YTD 2017
Revenues and other income	1,259	1,229	924	3,060	1,236
Gross profit	342	351	569	889	880
Operating expenses	-85	-85	-68	-257	-193
EBITDA	257	266	500	632	687
EBITDA margin 1)	20 %	22%	54%	21 %	56%
D&A and impairment	-57	-40	-39	-135	-121
EBIT	200	226	461	497	566
Cash flow to equity 1)	141	136	216	298	243

Group – Proportionate financials

NOK MILLION

1) See Alternative Performance Measures appendix for definition.

NOK MILLION Q3'18 Q2'18 Q3'17 2017 Revenues and other income 155 150 141 442 413 Operating expenses -29 -29 -22 -89 -65 EBITDA 127 121 119 353 347 EBITDA margin 1) 82% 81% 86% 80% 85% D&A and impairment -38 -39 -38 -112 -117 EBIT 89 82 81 241 230 Cash flow to equity 1) 47 36 42 109 113

The proportionate revenues increased compared to the same quarter last year, explained by a significant increase in D&C activities. Revenues and profitability in the other business segments remain fairly stable.

Operating expenses increased in the first nine months following increased early phase project development activities (non-capitalised) as well as somewhat higher costs in Power Production due to increased asset management activity.

Construction on the projects in contributed with NOK 130 million of a total EBITDA of NOK 257 million for the quarter. The EBITDA is line with last quarter but reduced from third quarter 2017 which was positively affected by the NOK 375 million gain on the partial sale of the Apodi project in Brazil.

As part of the ongoing review of project pipeline, some projects were discontinued during third quarter. Following these assessments, an impairment of NOK 17 million was made and the D&A and impairment charges increased to NOK 57 million (39) in the third quarter.

Scatec Solar increased its ownership share in Kalkbult, Linde and Dreunberg in South Africa from 39% to 45%. The transaction strengthens Scatec Solar's position in the South African market and secures further solid returns from this asset portfolio.

Power Production reached 73 GWh in the quarter compared to 72 GWh in the same period last year. The revenue increase from earlier quarters is primarily explained by revenues from asset management services rendered to new power plants as well as higher production in the Czech Republic. Scatec Solar provides a full range of asset management services including statutory compliance, accounting, financial reporting and contract management.

The increase in operating expenses from third quarter last year is explained by commencement of asset management activities for plants under construction. As asset management services yields lower margin than sale of electricity, the EBITDA margins for the quarter and first nine months are reduced compared to previous periods.

The Los Prados solar power plant in Honduras reached commercial operation 30 September 2018.

See Additional information on page 16 for a specification of financials and power production for each individual power plant company.

1) See Alternative Performance Measures appendix for definition.

Power Production

Operation & Maintenance

NOK MILLION	Q3'18	Q2'18	Q3'17	YTD 2018	YTD 2017
Revenues and other income	22	30	20	66	54
Operating expenses	-11	-11	-11	-34	-30
EBITDA	11	19	9	32	24
EBITDA margin 1)	49%	63%	45%	48%	44%
D&A and impairment	-	-	-	-1	-1
EBIT	11	19	9	31	23
Cash flow to equity 1)	9	15	7	25	18

Revenues in the third quarter reflect steady operation of the power plant portfolio and includes O&M revenues from the Los Prados plant in Honduras which commenced operations in the quarter. The quarter on quarter decrease in revenues are explained by the second quarter catch-up of NOK 8 million related to previously unrecorded revenues for two of the plants in Jordan.

The revenue and profitability growth in the first nine months are explained by, favourable weather conditions resulting in high performance bonus for the portfolio of plants in South Africa, commencement of O&M operations in Malaysia and Honduras as well as the catch-up related to the plants in Jordan.

Operating expenses mainly constitute fixed expenses and recurring maintenance activities according to a maintenance schedule.

1) See Alternative Performance Measures appendix for definition.

Development & Construction

NOK MILLION	Q3'18	Q2'18	Q3'17	YTD 2018	YTD 2017
Revenues and other income	1,077	1,045	760	2,539	760
Gross profit	160	167	405	369	405
Operating expenses	-30	-27	-21	-83	-54
EBITDA	130	140	384	286	351
EBITDA margin 1)	12%	13%	51%	11%	46%
D&A and impairment	-18	-1	-1	-20	-2
EBIT	113	139	383	266	349
Cash flow to equity 1)	105	108	183	226	159

The D&C revenues in the quarter were generated by the projects in Honduras, Malaysia, Brazil, Mozambique, Egypt and South Africa. Accumulated progress across the six construction projects was 34% at the end of third quarter. The high construction activity is continuing and the Quantum projects in Malaysia and Apodi in Brazil are expected to start production in the fourth quarter 2018.

The 14.9% gross margin for the quarter reflects the current mix of projects under construction and development. Quarterly fluctuations in gross margin must therefore be expected. The gross profit in third quarter 2017 was positively affected by the NOK 375 million gain on the partial sale of the Apodi project in Brazil.

Operating expenses comprised of approximately NOK 18 million (10) 1) for early stage development of new projects and NOK 12 million (11) related to the construction business.

Depreciation, amortization and impairment amounted to NOK 18 million 1), as the Company discontinued development of some projects.

1) See Alternative Performance Measures appendix for definition. 2) Figures in brackets refer to same quarter previous years.

Corporate

NOK MILLION	Q3'18	Q2'18	Q3'17	YTD 2018	YTD 2017
Revenues and other income	4	4	3	12	9
Operating expenses	-16	-18	-14	-51	-44
EBITDA	-11	-14	-11	-39	-35
D&A and impairment	-1	-	-	-2	-1
EBIT	-12	-14	-11	-41	-36
Cash flow to equity 1)	-20	-23	-15	-61	-47

1) See Alternative Performance Measures appendix for definition.

Revenues in the corporate segment refers to management fees charged to the other operating segments for corporate services rendered across the Group and remains fairly stable from quarter to quarter.

Operating expenses were stable for the first nine months and the increase compared to 2017 reflects the strengthened corporate functions over the recent quarters. These functions include management and corporate services such as finance, legal, HR, IT, corporate communication and sustainability.

Short term guidance Long term outlook

Power production

GWH	Q3'18	Q4'17	Q4'18e
Proportionate	73	71	105 - 115
100% basis	155	167	220 - 240

The estimated production in fourth quarter 2018 is based on expected production from projects in operation as of end third quarter 2018, and an estimate of production from power plants expected to be grid connected in fourth quarter 2018. There is uncertainty related to the exact timing of start-up of new power plants in the fourth quarter 2018.

Operation & Maintenance

2018 Operation & Maintenance revenues are expected to reach NOK 80-85 million with an EBITDA margin of around 40%. The increased revenue guidance reflects commencement of O&M services for new power plants.

Development & Construction

D&C revenues and margins are dependent on timing of commencement as well as progress on development and construction of projects.

Projects with a total capacity of 1,057 MW under construction represent awarded D&C contracts with a value of about NOK 8.0 billion. Based on current plans, about 50% of the D&C contract value is expected to be recognised as revenues in 2018.

Corporate

Corporate costs are expected to remain at current levels as the corporate functions have been strengthened over the recent quarters.

Scatec Solar's announced long-term targets for capacity growth and financial performance at the Capital Markets Update held 30 May 2018. The targets are summarized in the table below:

	1.5 GW IN OPERATION OR UNDER CONSTRUCTION BY END 2018	3.5 GW IN OPERATION OR UNDER CONSTRUCTION BY END 2021
Added capacity from current 357 MW	1.2 GW	2.2 GW
Post tax equity IRR	15%	15%
Development & Construction gross margin	15%	12-15%
Annual cash flow to equity from Power Production / O&M	NOK 430-480 million	NOK 750-850 million
Scatec Solar share of equity investments	NOK 1,850 million	NOK 2,000 – 2,500 million
Scatec Solar D&C net contribution	NOK 950 – 1,050 million	NOK 1,000 – 1,500 million

Consolidated statement of profit and loss

Profit and loss

NOK MILLION	Q3'18	Q2'18	Q3'17	YTD 18	YTD 17
Revenues	294	286	655	869	1,210
EBITDA	221	212	595	645	1,034
Operating profit (EBIT)	143	150	534	443	846
Profit before income tax	60	152	412	229	449
Profit/(loss) for the period	36	102	407	150	439
Profit/(loss) to Scatec Solar	14	98	383	94	374
Profit/(loss) to non-controlling interests	22	4	24	56	65

Revenues

Revenues from power sales are up 1.3% compared to same quarter last year, producing power from the same asset base. The increase in revenues is mainly explained by higher production in the Czech Republic and strengthening of the USD to NOK, partly offset by reduced production in South Africa and a weakening of the ZAR to NOK. The change in production volume from last year is driven by regular operational variability.

Revenues also include increased earnings, NOK 11 million (0), from joint ventures mainly related to the equity consolidated investments in Brazil.

Included in the revenues and net profit for third quarter 2017 was a gain of NOK 375 million related to the partial sale of the Apodi projects in Brazil to Equinor.

Operating profit

Profitability remains fairly stable compared to first and second quarter 2018. The Company has in recent quarters invested in both early stage development activities and also strengthening of the organisation following the commencement of several construction projects. This explains the growth in operating expenses compared to last year.

Consolidated operating expenses amounted to NOK 74 million (60) in the third quarter. This comprised approximately NOK 34 million (28) for operation of existing power plants, NOK 18 million (10) for early stage development of new projects, NOK 11 million (11) related to construction and NOK 11 million (11) of corporate expenses (excluding eliminated intersegment charges).

Net financial items

NOK MILLION	Q3'18	Q2'18	Q3'17	YTD 18	YTD 17
Financial income	61	130	11	207	41
Financial expenses	-121	-130	-119	-376	-377
Foreign exchange gains/(loss)	-22	1	-14	-44	-61
Net financial items	-83	2	-124	-214	-397

During the second quarter 2018, forward exchange contracts (FEC) were set up in order to eliminate currency exchange risk in the Upington projects in South Africa. The gain following the mark-to-market revaluation of open USD and EUR FECs amounts to NOK 44 million (0). The FECs are carried at fair value and fluctuate with changes in the exchange rates throughout the contract period.

Financial expenses mainly consist of interest expenses on non-recourse financing, NOK 97 million (105), and corporate funding, NOK 17 million (10). The interest expenses are in line with the trend from 2017. In the fourth quarter 2017 the Company recorded a one-off expense of NOK 27 million related to the refinancing of the senior unsecured bond. See note 6 for further information on the bond.

Profit before tax and net profit

The effective tax rate was 40% in the third quarter. The underlying tax rates in the companies in operation are in the range of 0% to 33%. In some markets, Scatec Solar receives special tax incentives intended to promote investments in renewable energy. The average effective tax rate fluctuates from quarter to quarter mainly based on construction progress. For further details, refer to note 7.

Non-controlling interests (NCI) represent financial investors in solar power plants. The allocation of profits between NCI and Scatec Solar is impacted by the fact that NCI only have shareholdings in solar power plants, while Scatec Solar also carries the cost of project development, construction, operation & maintenance and corporate functions.

For the first nine months power production revenues remained stable at NOK 839 million (835). Operating expenses increased to NOK 224 million (176) while net profit decreased to NOK 150 million (439), mainly driven by the Apodi projects sale in 2017.

Impact of foreign currency changes in the quarter

During the third quarter the NOK depreciated against the USD and CZK and appreciated against ZAR compared to the average rates for the second quarter. This negatively affected consolidated revenues by approximately NOK 12 million quarter on quarter while the net impact on net profit in the quarter was approximately NOK 2 million.

The quarter-on-quarter net foreign currency losses was up NOK 23 million, from a gain of NOK 1 million in the second quarter compared to a loss of NOK 22 million in the third quarter. These currency effects are to a large extent related to non-cash gains/losses on intercompany balances.

Following the movements in currencies in the third quarter, the Group has recognised a foreign currency translation loss of NOK 17 million in other comprehensive income related to the conversion of the subsidiaries' statements of financial position from the respective functional currencies to the Group's reporting currency.

Scatec Solar has not hedged the currency exposure on the expected cash distributions from the power plant companies.

Consolidated statement of financial position

Assets

NOK MILLION	Q3'18	Q4'17
Property, plant and equipment	7,479	5,618
Other non-current assets	1,152	961
Total non-current assets	8,631	6,580
Other current assets	803	797
Cash and cash equivalents	2,041	2,863
Total current assets	2,844	3,661
Total assets		11,475 10,240

In the consolidated statement of financial position, the solar power plant assets are valued at the Group's cost, reflecting elimination of gross margins generated through the project development and construction phase. At the same time, the ring-fenced non-recourse debt held in power plant assets is consolidated at full value. These accounting principles reduce the consolidated equity ratio.

The 31% net increase of non-current assets is mainly driven by the construction activities in Mozambique, Honduras, Malaysia, Brazil and Egypt. This is partly offset by depreciation of the operating power plants.

Current assets are reduced 22% compared to fourth quarter 2017 mainly driven by reduced net cash balance following cash outflows to cover capital expenditures in the power plant companies under construction partly offset by the NOK 600 million private placement that took place in June 2018. See note 6 for a detailed breakdown of cash balances and as well as the cash bridge.

Equity and liabilities

NOK MILLION	Q3'18	Q4'17
Equity	2,271	1,887
Non-current non-recourse project financing	5,966	6,164
Other non-current liabilities	1,784	1,254
Total non-current liabilities	7,750	7,418
Current non-recourse project financing	428	317
Other current liabilities	1,026	619
Total Current liabilities	1,454	935
Total liabilities	9,204	8,353
Total equity and liabilities	11,475 10,240
Book equity ratio	19.8%	18.4%

Total equity increased by NOK 384 million during the first nine months. The main drivers being the share capital increase offset by dividend distributions. The increased book equity ratio is mainly explained by the net effect of the above as well as increased current liabilities. The latter is associated with the progress of the construction activities and related supplier credits, mainly for the construction activities in Malaysia as well as shareholder loans provided by non-controlling interests in the Egypt project portfolio.

The more relevant equity to capitalisation ratio for the Recourse Group 1) (excluding the non-recourse financed project entities) as defined in the corporate bond agreement was 80% at the end of the third quarter. See note 6 for more information on the corporate bond agreement.

Consolidated cash flow

Net cash flow from consolidated operating activities amounted to NOK 65 million (191) in the third quarter 2018, compared to the EBITDA of NOK 221 million. The difference is primarily explained by negative changes in working capital, mainly related to power plants under construction.

Net cash flow from consolidated investing activities was NOK -660 million (-192), driven by further investment in new power plants as well as development of project pipeline and backlog.

Net cash flow from financing activities was NOK 244 million (-129), impacted by proceeds from non-recourse- and NCI financing of NOK 216 million and NOK 189 million (21 and 0) respectively, partly offset by interest and down payments on non-recourse financing of NOK 97 million (74) as well as dividends paid to non-controlling interests of NOK 63 million (77).

The cash flow for the first nine months is mainly impacted by the factors discussed above.

Refer to note 6 for a detailed cash overview.

Proportionate cash flow to equity

Scatec Solar's "proportionate share of cash flow to equity" 1), is an alternative performance measure that seeks to estimate the Company's ability to generate funds for equity investments in new solar power plant projects and/or for shareholder dividends over time.

NOK MILLION	Q3'18	Q2'18	Q3'17	YTD 18	YTD 17
Power Production	47	36	42	109	113
Operation & Maintenance	9	15	7	25	18
Development & Construction	105	108	183	226	159
Corporate	-20	-23	-15	-61	-47
Total	141	136	216	298	243

The increased cash flow to equity in the Power Production segment is primarily explained by new asset management fees to plants in construction and higher production in the Czech Republic, partly offset by debt repayments for 2018 in line with the agreed repayment schedule on the non-recourse financing loans. The cash flow to equity from the O&M segment is back to normalized level after the revenue catch-up which was recorded in the second quarter 2018.

Risk

Scatec Solar has entered into long-term fixed price contracts for the sale of electricity from all its current solar power plants and the entry into such contracts is a prerequisite for financing and construction of the projects in the backlog and pipeline. All existing electricity sales contracts are entered into with state-owned utilities typically under regulation of various state programs to promote renewable energy. As a consequence, Scatec Solar is to a certain degree subject to political risk in the countries it operates.

The main economic risk going forward relates to operational performance of existing power plants, timely completion of solar plants under construction and progress in the transitioning of projects in backlog through financial close and into construction.

Scatec Solar operates in several regions of the world with complex risk environments. This primarily relates to political, compliance, integrity and security risk. The Company mitigates these risks through comprehensive due diligence processes whereby country risk, permits, project agreements, partners, execution plans, security and all other relevant aspects of the project are carefully assessed. These assessments are done in close cooperation with a number of advisors including global risk and security consultancies.

In terms of specific financial risks, Scatec Solar is mainly exposed to currency risk, credit risk, liquidity risk and to some extent interest rate risk. Financial risk management in Scatec Solar is based on the objective of reducing cash flow effects and to a less extent accounting effects of these risks.

For further information refer to the 2017 Annual Report.

Related parties

Note 27 in the annual report for 2017 provides details of transactions with related parties and the nature of these transactions. For details on third quarter 2018 related party transactions, see note 9 of this interim report.

Forward looking statements

Forward-looking statements reflect current views about future events and are, by their nature, subject to significant risk and uncertainties because they relate to events and depend on circumstances that will occur in the future. Although Scatec Solar believes that these assumptions were reasonable when made, the Company cannot assure that the future results, level 1) See Alternative Performance Measures appendix for definition. of activity or performances will meet these expectations.

Project overview

PROJECT STAGE	Q3'18 CAPACITY (MW) 1)	Q2'18 CAPACITY (MW) 1)
In operation	357	322
Under construction	1,057	1,092
Project backlog	459	338
Project pipeline	3,820	4,188

1) Status per reporting date.

Projects under construction and backlog

Project backlog is defined as projects with a secure off-take agreement and assessed to have more than 90% likelihood of reaching financial close and subsequent realisation.

			CAPEX (100%,	ANNUAL PRODUCTION		SSO ECONOMIC
LOCATION	CAPACITY (MW)	CURRENCY 1)	MILLION)	(100%, GWH)	DEBT LEVERAGE	INTEREST
In Operation	357			700		49%
Under construction
Quantum, Malaysia	197	MYR	1,235	280	80%	68%
Apodi, Brazil	162	BRL	680	300	65%	44%
Mocuba, Mozambique	40	USD	80	75	72%	52%
Aswan, Egypt	400	USD	450	870	75%	51%
Upington, South Africa	258	ZAR	4,760	650	77%	42%
Total Under Construction	1,057	NOK	10,800	2,175		52%
Backlog
Segou, Mali	33	EUR	52	60	75%	51%
Los Prados II, Honduras	18	USD	20	35	70%	70%
RedSol, Malaysia	40	MYR	200	65	75%	100%
Ukraine	251	EUR	280	320	70%	70%
Guanizuil, Argentina	117	USD	95	310	60%	50%
Total Backlog	459	NOK	4,300	790		62%
Total	1,873		15,100	3,650		54%

1) 'Currency' specifics of PPA tariff, capex and project finance debt.

Total annual revenues from the 1,873 MW in operation, under construction and in backlog is expected to reach NOK 3,300 million based on 20-25-year Power Purchase Agreements (PPAs).

Scatec Solar will build, own and operate all power plants in the project backlog and pipeline.

Under construction

Quantum Malaysia, 197 MW

In December 2016 Scatec Solar partnered with a local ITRAMAS-led consortium that had signed three 21-year PPAs with the country's largest electricity utility, Tenaga Nasional Berhad (TNB).

Financial close and construction start was in October 2017. Project debt financing was raised through an Islamic Green Bond of MYR 1,000 million.

Commercial operation for the three solar plants is expected sequentially over the next few months.

Apodi, Brazil, 162 MW

In December 2016 Scatec Solar secured a 162 MW solar project in the state of Ceará in Brazil.

The project was bid and won by Kroma Ltda in the auction process held by ANEEL and signed a 20-year PPAs with CCEE, the Brazilian Power Commercialization Chamber.

In September 2017 Scatec Solar entered into a partnership with Equinor, establishing a 50/50 joint venture to build, own and operate large scale solar plants in Brazil.

Financing of the Apodi project has been secured through project financing from Banco Nordeste (BNB) with 65% debt leverage.

Commercial operation is expected in the fourth quarter 2018.

Mocuba, Mozambique, 40 MW

In October 2016 Scatec Solar and Norfund signed a PPA securing the sale of solar power over a 25-year period to the state-owned utility Electricidade de Mozambique (EDM).

Scatec Solar will build, own and operate the solar power plants with a 52.25% shareholding. Norfund and EDM will hold the remaining part of the equity.

Scatec Solar and partners reached financial close in March 2018 with debt financing from IFC, the International Finance Corporation, a member of the World Bank Group, and the Emerging Africa Infrastructure Fund, managed by Investec Asset Management and a part of the Private Infrastructure Development Group (PIDG).

Construction activities are on-going, and the plant is planned to be grid connected in the first quarter 2019.

Aswan, Egypt, 400 MW

In April 2017, Scatec Solar and partners signed six 25-year PPAs for projects in "Round 2" of the FiT program in Egypt totalling 400 MW (DC).

All located in the Ben Ban area near Aswan in Upper Egypt. Total investments for the 400 MW of solar plants is estimated at USD 450 million and the plants are expected to generate annual revenues of about USD 60 million over the 25-year contract period.

Scatec Solar is partnering with local developers, KLP Norfund Investments and Africa50 for equity investments in the projects.

European Bank for Reconstruction and Development (EBRD) is leading a consortium of banks providing total debt of USD 335 million.

Construction started in the second quarter 2018 and grid connection is expected during second half of 2019.

Upington, South Africa, 258 MW

In April 2015 Scatec Solar was awarded preferred bidder status for three projects in Upington in the fourth bidding round under REIPPP (Renewable Energy Independent Power Producer Programme) in South Africa.

Scatec Solar will build, own and operate the solar power plants with a 42% shareholding. Norfund will hold 18%, the surrounding Community of Upington 5% and a South African Black investor will hold the remaining 35% of the equity.

Financial close for the projects was reached in April 2018. A consortium of commercial banks and DFIs with Standard Bank in the lead are providing non-recourse project finance to the project.

Construction activities have commenced with grid connection expected towards the end of 2019.

Backlog

Segou, Mali, 33 MW

In July 2015, Scatec Solar ASA together with its development partners International Finance Corporation (IFC) and Power Africa 1, signed a 25-year PPA with Energie du Mali (EDM).

IFC and African Development Bank (AfDB) will provide the non-recourse project finance for the project. The project has also been awarded a USD 25 million concessional loan from the Climate Investment Funds under the Scaling Up Renewable Energy Program.

Scatec Solar will build, own and operate the solar power plant with a 51% shareholding. IFC Infraventures and Power Africa will hold the remaining part of the equity.

The lenders, IFC and the African development Bank, have approved the project finance for the project. Scatec Solar and partners are working to obtain final approvals from the Government of Mali on the project agreements.

Los Prados, Honduras, 18 MW

In October 2015 Scatec Solar and Norfund acquired the Los Prados project holding a 20-year PPA with Empresa Nacional de Energía Eléctrica (ENEE), the state-owned utility. The project is owned 70 percent by Scatec Solar and 30 percent by KLP Norfund Invest.

The 35 MW Phase 1 of the project was grid connected and reached commercial operation at the end of third quarter 2018. The 18 MW Phase 2 will be realised after required grid upgrades have been completed.

RedSol, Malaysia, 40 MW

In December 2017, Scatec Solar ASA and partners were awarded a 40 MW PV project in the PSS2 tender held by the Energy Commission in Malaysia.

The power plant, located in the state of Perak in Northwest Malaysia, is expected to deliver 65 GWh of electricity per year with annual revenues of approximately USD 6 million.

Scatec Solar will be the equity investor, turn-key EPC provider and provide operation & maintenance as well as asset management services to the power plant.

Ukraine, 251 MW

During 2018, Scatec Solar signed agreements securing projects with total capacity of 251 MW in Ukraine.

The projects will be realized under the country's Feed-in-Tariff scheme and the portfolio is expected to produce about 320,000 MWh per year. The plants are expected to deliver power also beyond the 10-year Feed-in-tariff period.

Total capex for the projects is estimated to EUR 270 million. The project finance process has been initiated with the European Bank of Reconstruction and Development (EBRD) in lead. Grid connection of the plants is expected towards the end of 2019.

Scatec Solar will be the lead equity investor in the projects and is targeting to secure additional equity partners for the projects. Further, Scatec Solar will be the Engineering, Procurement and Construction (EPC) provider and provide Operation & Maintenance as well as Asset Management services to all of the power plants.

Guanizuil, Argentina, 117 MW

In June 2018 Scatec Solar together with Equinor signed an agreement with the Portuguese company Martifer Renewables for the acquisition of the 117 MW PV project Guanizuil IIA located in the Province of San Juan in the northwest of Argentina.

The project was awarded a PPA in the RenovAR auction process held by CAMMESA, the Argentinian Wholesale Power Market Administrator, in November 2017.

The project company has a 20-year Power Purchase Agreement (PPA) with CAMMESA with an average price of approximately 50 USD/MWh and is expected to produce about 308,000 MWh annually. Construction start is expected later in 2018 with the plant to be placed in commercial operation by the end of 2019.

Scatec Solar will on a 50/50 joint venture basis together with Equinor build, own and operate the power plant in San Juan. Total capital expenditure to realise the plant is estimated at USD 95 million and will be funded with 40% equity from Equinor and Scatec Solar (50% each), and 60% from a construction bridge loan provided by Equinor. When the plant is in operation the sponsors plan to secure suitable long-term project financing from a third party.

Pipeline

In addition to projects in backlog Scatec Solar holds a solid pipeline of projects totalling 3,820 MW across four key regions.

LOCATION	CAPACITY (MW)
Latin America	563
Africa	1,725
Europe & Central Asia	670
South East Asia	862
Total pipeline	3,820

Latin America (563 MW)

Scatec Solar's development efforts in Latin America is mainly focused on Brazil and Argentina. Scatec Solar is partnering with Equinor in these markets.

Argentina is targeting to further expand its RenovAR program. PPAs have already been awarded to renewable energy projects of more than 4 GW. Over the past 18 months, approximately 1.5 GW of solar projects have been awarded in two consecutive utility scale solar auctions.

Brazil is a well-established market for renewable energy with about 1 GW of solar capacity installed and another 1 GW under construction.

In both markets Scatec Solar is seeking to acquire project rights from previous tender rounds, secure sites for participation in upcoming tenders as well negotiating corporate PPAs.

Africa (1,725 MW)

Scatec Solar holds sites representing 688 MW ready to be bid in the upcoming tender rounds in South Africa. A new tender ("round 5") under the REIPPP program is expected to be launched towards the end of 2018 or beginning of 2019.

In addition to South Africa, Scatec Solar is developing a broad pipeline of projects across a number of markets including Egypt, Nigeria, Kenya and in a number of other countries on the continent, in addition to investigating a number of opportunities for corporate PPAs.

Europe and Central Asia (670 MW)

Ukraine, Kazakhstan and Pakistan are key markets for Scatec Solar in Europe and Central Asia.

In Ukraine Scatec Solar is pursuing a number of projects totalling about 220 MW in addition to the 251 MW secured in project backlog. Ukraine is committed to integrate with the EU energy system with ongoing electricity market reforms and aiming to replace nuclear reactors and reduce supply of Russian gas with a target of 11% renewables by 2020.

In Kazakhstan, Scatec Solar is participating in tender processes with rounds both this year and next year.

In Pakistan, the 150 MW project portfolio in Sindh were awarded a "costs plus tariff" of 52.6 USD/MWh in January 2018. Scatec Solar and Nizam Energy has applied for the issuance of the power purchase agreement and the implementation agreement.

South East Asia (862 MW)

Malaysia, Bangladesh and Vietnam are key markets for Scatec Solar in South East Asia. In Malaysia, a new government is now in place after the election and it is expected the new government will maintain the same level of ambition for the renewable energy sector. Scatec Solar continues to prepare for the next tender round as well as pursuing a number of bi-lateral opportunities.

In Bangladesh, the first project developed by Scatec Solar of 60 MW has been approved by the Prime Minister and a tariff level has been awarded. Scatec Solar is now working with the authorities to finalise project agreements. In parallel, Scatec Solar is developing other projects and is in total working on a portfolio of about 310 MW.

In Vietnam, the government has extended the Feed-in tariff for one Province. Scatec Solar is currently working on a portfolio of 200 MW in this region and also developing other projects for implementation under the future scheme Vietnam.

Proportionate financials Break down of power production segment Key financials

Q3 2018

NOK MILLION	CZECH REPUB.	SOUTH AFRICA	RWANDA	HONDURAS	JORDAN	OTHER	TOTAL
Revenues	42	64	2	12	26	11	155
OPEX	-3	-10	-1	-2	-3	-10	-29
EBITDA	39	54	1	9	23	1	127
EBITDA margin	93%	85%	60%	79%	88%	-	82%
Net interest expenses 1)	-5	-22	-1	-4	-6	3	-35
Normalised loan repayments 1)	-6	-14	-1	-5	-6	-	-32
Normalised income tax payments 1)	-4	-5	-	-	-1	-3	-13
Cash flow to equity	22	14	-1	-	11	1	47
SSO economic interest	100%	39%	54%	40%	60%
Net production (GWh)	8.6	34.8	2	9.7	17.9	-	72.8

1) See Alternative Performance Measures appendix for definition.

Q3 2017

NOK MILLION	CZECH REPUB.	SOUTH AFRICA	RWANDA	HONDURAS	JORDAN	OTHER	TOTAL
Revenues	33	68	4	11	23	3	141
OPEX	-3	-9	-1	-1	-1	-6	-22
EBITDA	30	59	3	9	22	-4	119
EBITDA margin	91%	101%	45%	35%	56%	-133%	-85%
Net interest expenses 1)	-5	-26	-1	-4	-7	1	-42
Normalised loan repayments 1)	-6	-12	-2	-5	-4	-	-28
Normalised income tax payments 1)	-3	-5	-	-	-	1	-8
Cash flow to equity	17	17	-	1	10	-2	42
SSO economic interest	100%	39%	54%	40%	60%
Net production (GWh)	7.2	36.2	1.8	10.0	17.1	-	72.2

1) See Alternative Performance Measures appendix for definition.

Financial position and working capital breakdown Proportionate financials

30 JUNE 2018

		POWER PLANT COMPANIES IN OPERATION				POWER PLANT COMPANIES UNDER CONSTRUCTION
NOK MILLION	CZECH REPUB.	SOUTH AFRICA		RWANDA HONDURAS	JORDAN	MALAYSIA	BRAZIL	SOUTH AFRICA	MOZAM BIQUE	EGYPT	TOTAL PROPOR TIONATE
Project equity 1)	167	123	22	593	197	320	252	363	70	5	2,111
Total assets 1)	595	1,133	89	1,639	713	1,717	571	624	216	275	6,795
PP&E 2)	469	940	80	1,405	546	1,232	518	350	105	165	5,156
Cash	66	122	5	130	136	381	38	63	24	11	907
Gross interest bearing debt 1)	373	890	63	493	427	1,340	285	-	133	86	3,794
Net interest bearing debt 1)	307	767	58	363	291	959	247	-63	109	75	2,887
Net working capital 1)	-25	-54	-8	-55	-94	8	-26	-52	73	-87	-266
SSO economic interest	100 %	39 %	54 %	55 %	60 %	68 %	44 %	51 %	53 %	53 %	NA

1) See Alternative Performance Measures appendix for definition.

Bridge from proportionate to consolidated financials

30 JUNE 2018

NOK MILLION	TOTAL PROPORTIONATE	RESIDUAL OWNERSHIP INTERESTS	EQUITY CONSOLIDATED ENTITIES	D&C, O&M, CORPORATE, ELIMINATIONS	CONSOLIDATED
Project equity 1)	2,111	1,640	575	-905	2,271
Total assets	6,795	5,776	1,305	209	11,475
PP&E 2)	5,156	4,445	1,183	-987	7,431
Cash 1)	907	684	87	536	2,041
Gross interest bearing debt 1)	3,794	3,250	651	742	7,136
Net interest bearing debt 1)	2,887	2,566	564	206	5,095
Net working capital 1)	-291	-310	-59	-261	-804

1) See Alternative Performance Measures appendix for definition.

2) The amount of NOK 994 is net after reduction of capitalized spending on projects under development of NOK 163 (on a consolidated basis).

Condensed interim financial information

Interim consolidated statement of profit or loss

NOK MILLION	NOTES	Q3 2018	Q3 2017	YTD 2018	YTD 2017	FULL YEAR 2017
Revenues	2	283.4	279.7	839.3	835.2	1,121.1
Net gain/(loss) from sale of project assets	2,3	-	375.2	-	375.2	377.8
Net income/(loss) from JVs and associated companies	2	10.7	-	30.0	-0.4	-7.4
Total revenues and other income		294.2	654.9	869.3	1,210.0	1,491.5
Personnel expenses	2	-31.5	-26.8	-98.8	-78.4	-107.0
Other operating expenses	2	-42.1	-33.6	-125.3	-97.8	-143.2
Depreciation, amortisation and impairment	2,3	-78.0	-60.3	-202.7	-188.2	-248.1
Operating profit		142.6	534.3	442.5	845.6	993.2
Interest and other financial income	4,5	60.5	11.1	206.5	40.8	51.2
Interest and other financial expenses	4,5	-121.5	-119.3	-376.3	-377.1	-523.8
Net foreign exchange gain/(losses)	4,5	-21.7	-14.3	-44.1	-60.5	-59.8
Net financial expenses		-82.7	-122.5	-213.9	-396.8	-532.3
Profit/(loss) before income tax		59.9	411.8	228.6	448.9	460.9
Income tax (expense)/benefit	7	-24.0	-5.0	-78.6	-9.6	-23.0
Profit/(loss) for the period		35.9	406.8	150.0	439.3	437.9
Profit/(loss) attributable to:
Equity holders of the parent		14.4	383.0	94.5	374.0	339.1
Non-controlling interests		21.5	23.8	55.5	65.3	98.8
Basic earnings per share (NOK)	11	0.13	3.71	0.88	3.73	3.36
Diluted earnings per share (NOK)	11	0.13	3.70	0.88	3.72	3.35

Interim consolidated statement of comprehensive income

NOK MILLION	NOTES	Q3 2018	Q3 2017	YTD 2018	YTD 2017	FULL YEAR 2017
Profit/(loss) for the period		35.9	406.8	150.0	439.3	437.9
Other comprehensive income:
Items that may subsequently be reclassified to profit or loss
Net movement of cash flow hedges	5	13.0	-24.2	33.8	-62.7	-61.8
Income tax effect	7	-3.6	6.8	-9.5	17.5	16.9
Foreign currency translation differences		-16.7	-37.0	-106.0	-6.9	30.8
Net other comprehensive income to be reclassified to profit or loss in subsequent periods		-7.3	-54.4	-81.7	-52.0	-14.2
Total comprehensive income for the period net of tax		28.6	353.1	68.3	388.0	423.7
Attributable to:
Equity holders of the parent		8.7	371.9	37.1	386.5	336.1
Non-controlling interests		19.9	-19.5	31.3	0.8	87.7

Interim consolidated statement of financial position

NOK MILLION	NOTES	AS OF 30 SEPTEMBER 2018	AS OF 31 DECEMBER 2017
ASSETS
Non-current assets
Deferred tax assets	7	490.2	401.9
Property, plant and equipment – in solar projects	3	7,431.2	5,580.4
Property, plant and equipment – other	3	48.0	37.9
Goodwill		23.2	24.1
Financial assets	4,5	10.2	0.2
Investments in JVs and associated companies		467.8	415.1
Other non-current assets	9	161.0	120.1
Total non-current assets		8,631.5	6,579.8
Current assets
Trade and other receivables		225.4	238.8
Other current assets	9	415.0	558.5
Financial assets	4,5	162.5	0.2
Cash and cash equivalents	6	2,040.7	2,863.1
Total current assets		2,843.6	3,660.6
TOTAL ASSETS		11,475.0	10,240.4

Interim consolidated statement of financial position

NOK MILLION	NOTES	AS OF 30 SEPTEMBER 2018	AS OF 31 DECEMBER 2017
EQUITY AND LIABILITIES
Equity
Share capital		2.8	2.6
Share premium		1,793.5	1,194.7
Total paid in capital		1,796.3	1,197.2
Retained earnings		43.7	31.0
Other reserves		25.4	81.7
Total other equity		69.1	112.7
Non-controlling interests		405.3	577.3
Total equity	8	2,270.7	1,887.2
Non-current liabilities
Deferred tax liabilities	7	320.7	184.9
Non-recourse project financing	4	5,965.6	6,163.9
Bonds	6	742.3	740.8
Financial liabilities	4,5	2.8	28.7
Other non-current liabilities	9	718.6	299.4
Total non-current liabilities		7,750.0	7,417.7
Current liabilities
Trade and other payables	10	260.7	216.3
Income tax payable	7	33.5	19.4
Non-recourse project financing	4	428.2	316.6
Financial liabilities	4,5,6	10.2	26.6
Other current liabilities	9	721.7	356.5
Total current liabilities		1,454.3	935.4
Total liabilities		9,204.3	8,353.1
TOTAL EQUITY AND LIABILITIES		11,475.0	10,240.4

Oslo, 18 October 2018

The Board of Directors of Scatec Solar ASA

Interim consolidated statement of changes in equity

				OTHER RESERVES
NOK MILLION	SHARE CAPITAL	SHARE PREMIUM	RETAINED EARNINGS	FOREIGN CURRENCY TRANSLATION	HEDGING RESERVES	TOTAL	NON CONTROLLING INTERESTS	TOTAL EQUITY
At 1 January 2017	2.3	819.1	-222.0	83.7	1.6	684.7	628.0	1,312.7
Profit for the period	-	-	374.0	-	-	374.0	65.3	439.3
Other comprehensive income	-	-	-0.7	29.6	-16.4	12.5	-64.6	-52.0
Total comprehensive income	-	-	373.3	29.6	-16.4	386.5	0.8	387.3
Share-based payment	-	2.2	-	-	-	2.2	-	2.2
Share capital increase 1)	0.2	379.7	-	-	-	379.9	-	379.9
Transaction cost, net after tax	-	-6.9	-	-	-	-6.9	-	-6.9
Dividend distribution	-	-	-73.3	-	-	-73.3	-182.6	-255.9
Capital increase from NCI 2)	-	-	-	-	-	-	23.7	23.7
At 30 September 2017	2.6	1,194.0	78.0	113.3	-14.8	1,373.1	469.9	1,843.0
At 1 October 2017	2.6	1,194.0	78.0	113.3	-14.8	1,373.1	469.9	1,843.0
Profit for the period	-	-	-34.9	-	-	-34.9	33.5	-1.4
Other comprehensive income	-	-	1.3	-8.8	-8.0	-15.6	53.4	37.9
Total comprehensive income	-	-	-33.6	-8.8	-8.0	-50.4	86.9	36.5
Share-based payment	-	0.7	-	-	-	0.7	-	0.7
Dividend distribution	-	-	-	-	-	-	-2.7	-2.7
Capital increase from NCI 2)	-	-	-	-	-	-	9.8	9.8
Step-by-step acquisition	-	-	-13.4	-	-	-13.4	13.4	-
At 31 December 2017	2.6	1,194.7	31.0	104.5	-22.8	1,309.9	577.3	1,887.2
At 1 January 2018	2.6	1,194.7	31.0	104.5	-22.8	1,309.9	577.3	1,887.2
Profit for the period	-	-	94.5	-	-	94.5	55.5	150.0
Other comprehensive income	-	-	-1.1	-67.0	10.8	-57.4	-24.2	-81.7
Total comprehensive income	-	-	93.3	-67.0	10.8	37.1	31.3	68.3
Share-based payment	-	3.5	-	-	-	3.5	-	3.5
Share capital increase 3)	0.3	605.7	-	-	-	606.0	-	606.0
Transaction cost, net after tax	-	-10.4	-	-	-	-10.4	-	-10.4
Dividend distribution	-	-	-80.7	-	-	-80.7	-210.8	-291.5
Capital increase from NCI 2)	-	-	-	-	-	-	7.5	7.5
At 30 September 2018	2.8	1,793.5	43.7	37.5	-12.1	1,865.4	405.3	2,270.7

1) During first quarter 2017 the Group increased the share capital with NOK 379.7

2) Non-controlling interests.

3) During first half year 2018 the Group increased the share capital with NOK 6.2 in first quarter and with NOK 600.0 in second quarter.

Interim consolidated statement of cash flow

NOK MILLION	NOTES	Q3 2018	Q3 2017	YTD 2018	YTD 2017	FULL YEAR 2017
Cash flow from operating activities
Profit before taxes		59.9	411.8	228.6	448.9	460.9
Taxes paid	7	-20.6	-2.1	-39.9	-13.9	-17.4
Carry-back tax payment received	7	-	-	-	-	8.8
Depreciation and impairment	3	78.0	60.3	202.7	188.2	248.1
Net income associated companies/sale of project assets		-10.7	-374.4	-30.0	-373.9	-370.6
Interest and other financial income	4	-60.5	-11.1	-206.5	40.8	-51.2
Interest and other financial expenses	4	121.5	119.3	376.3	377.1	523.8
Unrealised foreign exchange (gain)/loss	4	21.7	1.8	44.1	61.2	-55.7
(Increase)/decrease in trade and other receivables		-7.0	-11.4	13.4	37.8	-7.3
(Increase)/decrease in other current/non-current assets		-5.4	-149.5	-40.5	-114.5	-420.9
Increase/(decrease) in trade and other payables	10	-164.4	2.4	44.3	1.7	187.0
Increase/(decrease) in other current liabilities		-15.2	149.0	365.3	113.4	153.9
Increase/(decrease) in financial assets and other changes	5,9	63.5	-5.1	106.8	-16.9	185.2
Net cash flow from operating activities		60.7	190.9	1,064.6	668.2	844.1
Cash flow from investing activities
Interest received	4	20.9	11.1	61.1	40.8	51.2
Investments in property, plant and equipment	3	-717.3	-156.3	-2,447.2	-331.8	-673.1
Net investment in associated companies		40.8	-47.2	-77.9	-47.2	-252.3
Net cash flow from investing activities		-655.6	-192.4	-2,464.0	-338.1	-874.1
Cash flow from financing activities
Proceeds from NCI shareholder financing 1)		188.7	21.3	388.8	21.3	31.4
Interest paid	4	-58.0	-47.5	-355.4	-284.8	-475.9
Proceeds from non-recourse project financing	4	216.6	-	457.7	-	1,973.8
Repayment of non-recourse project financing	4	-39.8	-26.2	-168.4	145.6	-230.6
Share capital increase		-	-	595.6	373.0	373.0
Proceeds from corporate bond issue	6	-	-	-	-	750.0
Repayment of corporate bond	6	-	-	-	-	-523.3
Dividends paid to equity holders of the parent company	8	-	-	-80.7	-73.3	-73.3
Dividends and other distributions paid to non-controlling interest		-63.1	-77.0	-210.8	-182.6	-185.3
Net cash flow from financing activities		244.4	-129.4	626.8	-292.0	1,639.8
Net increase/(decrease in cash and cash equivalents		-350.6	-130.9	-772.7	38.1	1,609.8
Effect of exchange rate changes on cash and cash equivalents		-38.1	-58.9	-49.7	-56.4	116.1
Cash and cash equivalents at beginning of the period	6	2,429.4	1,308.8	2,863.1	1,137.2	1,137.2
Cash and cash equivalents at end of the period	6	2,040.7	1,118.9	2,040.7	1,118.9	2,863.1
Cash in power plant companies in operation	6	721.9	759.4	721.9	759.4	793.3
Cash in power plant companies under construction	6	783.0	137.2	783.0	137.2	1,323.9
Other restricted cash	6	46.7	46.3	46.7	46.3	57.8
Free cash	6	489.2	176.0	489.2	176.0	688.1
Total cash and cash equivalents	6	2,040.7	1,118.9	2,040.7	1,118.9	2,863.1
Hereof presented as:
Cash and cash equivalents		2,040.7	1,118.9	2,040.7	1,118.9	2,863.1

1)Proceeds from non-controlling interest shareholder financing include both equity contributions and shareholder loans.

Notes to the condensed interim consolidated financial statements

Note 1 Organisation and basis for preparation

Corporate information

Scatec Solar ASA is incorporated and domiciled in Norway. The address of its registered office is Karenslyst Allé 49, NO-0279 Oslo, Norway. Scatec Solar was established on 2 February 2007.

Scatec Solar ASA ("the Company"), its subsidiaries and investments in associated companies ("the Group" or "Scatec Solar") is a leading independent solar power producer. The Company is pursuing an integrated business model across the complete life cycle of utility-scale solar photovoltaic (PV) power plants including project development, financing, construction, ownership and operation and maintenance.

The condensed interim consolidated financial statements were authorised by the Board of Directors for issue on 19 October 2018.

Basis of preparation

These condensed interim consolidated financial statements are prepared in accordance with recognition, measurement and presentation principles consistent with International Financing Reporting Standards as adopted by the European Union ("IFRS") for interim reporting under International Accounting Standard ("IAS") 34 Interim Financial Reporting. These condensed interim consolidated financial statements are unaudited.

These condensed interim consolidated financial statements are condensed and do not include all of the information and notes required by IFRS for a complete set of consolidated financial statements. These condensed interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements.

The accounting policies adopted in the preparation of the condensed interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2017, with exception for the reporting on operating segments as described below. Standards and

interpretations mentioned in note 32 of the Group's annual report 2017 with effective date from financial year 2018 (IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers), do not have a significant impact on the Group's condensed interim consolidated financial statements.

From first quarter 2018 the segment financials are reported on a proportionate basis in line with how the management team assesses the segment performance. With proportionate financials Scatec Solar reports its share of revenues, expenses, profits and cash flows from its subsidiaries without eliminations, based on Scatec Solar's economic interest in the subsidiaries. The Group uses proportionate financials to improve transparency on underlying value creation across Scatec Solar's business activities.

The functional currency of the companies in the Group is determined based on the nature of the primary economic environment in which each company operates. The functional currency of the parent company Scatec Solar ASA and the presentation currency of the Group is Norwegian kroner (NOK). All amounts are presented in NOK million unless otherwise stated.

As a result of rounding adjustments, the figures in some columns may not add up to the total of that column.

Significant estimates and judgements

The preparation of condensed interim consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.

Judgements

In the process of applying the Group's accounting policies, management make judgements of which the following have the most significant effect on the amounts recognised in the condensed interim financial statements:

Consolidation of power plant companies

Scatec Solar's value chain comprises all downstream activities such as project development, financing, construction and operations, as well as having an asset management role through ownership of the solar power plants. Normally Scatec Solar enters into partnerships for the shareholding of the power plant companies owning the power plants. To be able to utilise the business model fully, Scatec Solar seeks to obtain operational control of the power plant companies. Operational control is obtained through governing bodies, shareholder agreements and other contractual arrangements. Other contractual arrangements may include Scatec Solar's role as the developer of the project, EPC provider (construction), operation and maintenance service provider and asset management service provider.

Scatec Solar would normally seek to undertake the following distinct roles in its projects:

• As the largest shareholder providing equity financing to the project
• As (joint) developer, including obtaining project rights, land permits, off-take agreements and other local approvals
• As EPC supplier, responsible for the construction of the project
• As provider of operation and maintenance services to the projects, responsible for the day-to-day operations of the plant
• As provider of management services to the power plant companies

Even though none of the projects Scatec Solar are involved with are identically structured, the five roles/activities described above constitute the main and relevant activities which affect the variable return. When assessing whether

Scatec Solar controls a power plant company as defined by IFRS 10 Consolidated Financial Statements, all of the above roles and activities are analysed. During first half year 2018 three power plant companies (holding the Upington projects) were consolidated for the first time. The activity so far is limited, and construction is expected to commence in the fourth quarter. Scatec Solar's economic interest in the companies is 45.5%. The Company has concluded that it through its investment has the power to control these entities. Furthermore, Scatec Solar is exposed to variable returns and has the ability to affect those returns through its power over the companies.

Refer to note 2 of the 2017 annual report for further information on judgements, including control assessments made in previous years.

Estimates and assumptions

The estimates and underlying assumptions are reviewed on an ongoing basis, considering the current and expected future market conditions. Changes in accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Seasonality in operations

Interim period results are not necessarily indicative of results of operations or cash flows for an annual period. The Group's operating results are impacted by external factors, such as weather conditions. The power production at the PV solar parks is directly impacted by seasonal changes in solar irradiance which is normally at its highest during the summer months. This effect is to a certain degree offset in the consolidated revenues due to the fact that the Group operates PV solar parks on both the northern and southern hemisphere.

Note 2 Operating segments

Operating segments align with internal management reporting to the Group's chief operating decision maker, defined as the Group management team. The operating segments are determined based on differences in the nature of their operations, products and services. Scatec Solar manages its operations in three segments; Power Production (PP), Operation & Maintenance (O&M) and Development & Construction (D&C).

Financing and operation of solar power plants is ring-fenced in power plant companies with a non-recourse project finance structure - where Scatec Solar contributes with the required equity, either alone or together with co-investors.

From first quarter 2018 the segment financials are reported on a proportionate basis as described in note 1. A reconciliation between proportionate financials and consolidated financials are provided in the tables below. Comparative information in this note for prior year has been restated.

Power Production

The Power Production segment manages the Group's power producing assets and derives its revenue from the production and sale of solar generated electricity based on long-term Power Purchase Agreements or Feed-in-Tariffs. Finance and operation of the plants is ring-fenced in power plant companies with a non-recourse finance structure. This implies that the project debt is only secured and serviced by project assets and the cash flows generated by the project, and that there is no obligation for project equity investors to contribute additional funding in the event of a default. Free cash flows after debt service are distributed from these power plant companies to Scatec Solar, and any other project equity investors in accordance with the shareholding and the terms of the finance documents.

Operation and Maintenance

The Operation and Maintenance segment delivers services to ensure optimised operations of the Group's solar power producing assets through a complete and comprehensive range of services for technical and operational management. Revenues are based on service agreements with a periodic base fee as well as a potential performance bonus.

Development and Construction

The Development and Construction segment derives its revenue from the sale of development rights and construction services to power plant companies set up to operate the Group's solar power plants. These transactions are primarily made with companies that are under the control of the Group and hence are being consolidated. Revenues from transfer of development rights are recognised upon the transfer of title.

Revenues from construction services are based on fixed price contracts and are accounted for using the percentage of completion method.

Corporate

Corporate consists of the activities of corporate services, management and group finance.

No segments have been aggregated to form these reporting segments. Revenues from transactions between the D&C, O&M and PP segments, where Scatec Solar is deemed to hold a controlling interest, are presented as internal revenues in the segment reporting and eliminated in the consolidated statement of profit or loss. These transactions are based on international contract standards and terms negotiated at arm's length with lenders and co-investors in each power plant company.

Q3 2018

			PROPORTIONATE FINANCIALS
NOK MILLION	POWER PRODUCTION	OPERATION & MAINTENANCE	DEVELOPMENT & CONSTRUCTION CORPORATE		TOTAL	RESIDUAL OWNERSHIP	INTERESTS 1) ELIMINATIONS 2)	CONSOLIDATED FINANCIALS
External revenues Internal revenues	145.9 9.5	- 22.1	- 1,077.2	-	145.9 4.2 1,113.0	137.5 78.3	- -1,191.3	283.4 -
Net gain/(loss) from sale of project assets	-	-	-	-	-	-	-	-
Net income/(loss) from JV and associates	-	-	-	-	-	-	10.7	10.7
Total revenues and other income	155.4	22.1	1,077.2		4.2 1,259.0	215.8	-1,180.6	294.2
Cost of sales	-	-	-916.9	-	-916.9	1.3	915.6	-
Gross profit	155.4	22.1	160.3	4.2	342.1	217.1	-265.0	294.2
Personnel expenses	-3.0	-5.8	-13.0	-9.7	-31.4	-	-	-31.5
Other operating expenses	-25.7	-5.4	-16.8	-6.0	-53.9	-17.4	29.3	-42.1
EBITDA	126.8	10.9	130.4	-11.5	256.7	199.7	-235.8	220.6
Depreciation and impairment	-37.8	-0.2	-17.9	-0.8	-56.7	-36.6	15.4	-78.0
Operating profit (EBIT)	89.0	10.8	112.5	-12.3	200.0	163.0	-220.4	142.6

1) Residual ownerships interests share of the proportionate financials in subsidiaries where SSO does not have 100% economic interest.

2) Eliminations made in the preparation of the Group's IFRS consolidated financials.

Q3 2017

			PROPORTIONATE FINANCIALS
NOK MILLION	POWER PRODUCTION	OPERATION & MAINTENANCE	DEVELOPMENT & CONSTRUCTION CORPORATE		TOTAL	RESIDUAL OWNERSHIP	INTERESTS 1) ELIMINATIONS 2)	CONSOLIDATED FINANCIALS
External revenues	138.6	-	-	-	138.6	141.1	-	279.7
Internal revenues	2.3	19.8	385.2	3.3	410.6	-	-410.6	-
Net gain/(loss) from sale of project assets	-	-	375.2	-	375.2	-	-	375.2
Net income/(loss) from JV and associates	-	-	-0.1	-	-0.1	0.1	-	-
Total revenues and other income	140.9	19.8	760.4	3.3	924.4	141.2	-410.6	654.9
Cost of sales	-	-	-355.8	-	-355.8	-	355.8	-
Gross profit	140.9	19.8	404.6	3.3	568.6	141.2	-54.8	654.9
Personnel expenses	-3.6	-3.5	-10.4	-9.2	-26.8	-	0.2	-26.8
Other operating expenses	-18.4	-7.5	-10.6	-5.0	-41.5	-17.5	25.2	-33.6
EBITDA	118.8	8.8	383.6	-11.0	500.2	123.6	-29.4	594.4
Depreciation and impairment	-37.9	-0.2	-0.6	-0.4	-39.1	-37.3	16.1	-60.3
Operating profit (EBIT)	81.0	8.6	383.0	-11.3	461.3	86.4	-13.3	534.3

1) Residual ownerships interests share of the proportionate financials in subsidiaries where SSO does not have 100% economic interest 2) Eliminations made in the preparation of the Group's IFRS consolidated financials.

YTD 2018

			PROPORTIONATE FINANCIALS
NOK MILLION	POWER PRODUCTION	OPERATION & MAINTENANCE	DEVELOPMENT & CONSTRUCTION CORPORATE		TOTAL	RESIDUAL OWNERSHIP	INTERESTS 1) ELIMINATIONS 2)	CONSOLIDATED FINANCIALS
External revenues	414.5	-	-	-	414.5	424.8	-	839.3
Internal revenues	27.4	66.1	2,539.4		12.3 2,645.2	3.2	-2,648.3	-
Net gain/(loss) from sale of project assets	-	-	-	-	-	-	-	-
Net income/(loss) from JV and associates	-	-	-	-	-	-	30.0	30.0
Total revenues and other income	441.9	66.1	2,539.4		12.3 3,059.7	427.9	-2,618.3	869.3
Cost of sales	-	-	-2,170.7		- -2,170.7	136.6	2,034.1	-
Gross profit	441.9	66.1	368.7	12.3	889.0	564.6	-584.2	869.3
Personnel expenses	-11.2	-16.2	-41.7	-29.8	-99.0	0.5	-0.4	-98.8
Other operating expenses	-77.4	-18.3	-41.1	-21.6	-158.3	-46.3	79.3	-125.3
EBITDA	353.3	31.6	286.0	-39.1	631.7	518.8	-505.3	645.2
Depreciation and impairment	-112.5	-0.6	-19.9	-1.6	-134.6	-113.5	45.4	-202.7
Operating profit (EBIT)	240.8	31.0	266.1	-40.8	497.1	405.3	-459.9	442.5

1) Residual ownerships interests share of the proportionate financials in subsidiaries where SSO does not have 100% economic interest.

2) Eliminations made in the preparation of the Group's IFRS consolidated financials.

YTD 2017

	PROPORTIONATE FINANCIALS
NOK MILLION	POWER PRODUCTION	OPERATION & MAINTENANCE	DEVELOPMENT & CONSTRUCTION CORPORATE		TOTAL	RESIDUAL OWNERSHIP	INTERESTS 1) ELIMINATIONS 2)	CONSOLIDATED FINANCIALS
External revenues	406.7	-	-	-	406.7	428.5	-	835.2
Internal revenues	5.9	54.1	385.4	9.0	454.4	-	-454.4	-
Net gain/(loss) from sale of project assets	-	-	375.2	-	375.2	-	-	375.2
Net income/(loss) from JV and associates	-	-	-0.5	-	-0.5	0.1	-	-0.4
Total revenues and other income	412.6	54.1	760.1	9.0	1,235.8	428.7	-454.4	1,210
Cost of sales	-	-	-355.8	-	-355.8	-	355.8	-
Gross profit	412.6	54.1	404.3	9.0	-88	428.7	-98.6	1,210
Personnel expenses	-11.2	-10.2	-29.3	-27.5	-78.2	-	0.4	-78.4
Other operating expenses	-54.0	-19.9	-24.4	-16.7	-115.0	-52.2	69.0	-97.8
EBITDA	347.3	23.9	350.7	-35.3	686.6	376.3	-29.3	1,033.8
Depreciation and impairment	-117.3	-0.7	-1.8	-1.0	-120.8	-118.0	50.6	-188.2
Operating profit (EBIT)	230.1	23.1	349.0	-36.2	566.0	258.5	21.1	845.6

1) Residual ownerships interests share of the proportionate financials in subsidiaries where SSO do not have 100% economic interest.

2) Eliminations made in the preparation of the groups IFRS consolidated financials.

FULL YEAR 2017

	PROPORTIONATE FINANCIALS
NOK MILLION	POWER PRODUCTION	OPERATION & MAINTENANCE	DEVELOPMENT & CONSTRUCTION CORPORATE		TOTAL	RESIDUAL OWNERSHIP	INTERESTS 1) ELIMINATIONS 2)	CONSOLIDATED FINANCIALS
External revenues	532.2	-	-	-	532.2	588.8	-	1,121.0
Internal revenues	11.9	68.6	681.9	13.1	775.5	27.2	-802.7	-
Net gain/(loss) from sale of project assets	-	-	377.8	-	377.8	-	-	377.8
Net income/(loss) from JV and associates	-	-	-5.4	-	-5.4	2.1	-4.1	-7.4
Total revenues and other income	544.1	68.7	1,054.3		13.1 1,680.1	618.2	-806.8	1,491.5
Cost of sales	-	-	-612.0	-	-612.0	21.8	590.2	-
Gross profit	544.1	68.7	442.3		13.1 1,068.2	640.0	-216.6	1,491.5
Personnel expenses	-15.2	-14.6	-42.7	-35.6	-108.0	-0.1	1.1	-107.0
Other operating expenses	-75.0	-26.7	-39.3	-27.5	-168.6	-67.6	93.0	-143.2
EBITDA	453.9	27.4	360.3	-5	791.5	572.3	-122.5	1,241.3
Depreciation and impairment	-155.8	-0.6	-2.6	-1.4	-160.4	-154.5	66.8	-248.1
Operating profit (EBIT)	298.1	26.8	357.7	-51.4	631.1	418.0	-55.9	993.2

1) Residual ownerships interests share of the proportionate financials in subsidiaries where SSO do not have 100% economic interest.

2) Eliminations made in the preparation of the groups IFRS consolidated financials.

Note 3 Property, plant and equipment

The Group operates solar power plants in Europe, Middle East, Africa and South America. During third quarter 2017 construction commenced on the Los Prados power plant (35 MW) in Honduras as well as the Quantum plants (197 MW) in Malaysia while construction of the four Apodi plants (162 MW) in Brazil commenced in the fourth quarter 2017. The power plant companies in Brazil are equity consolidated and hence not included in the below table. Construction of the Mocuba power plant (40 MW) in Mozambique began in the first quarter 2018 while construction of the Aswan

plants (400 MW) in Egypt and the Upington plants (258 MW) in South Africa commenced in the second quarter 2018.

The Los Prados power plant was grid connected and reached commercial operation 30 September 2018.

The impairment charges in the third quarter 2018 amounted to NOK 17 million (2) as the Company discontinued development of some projects.

NOK MILLION	SOLAR POWER PLANTS	SOLAR POWER PLANTS UNDER CONSTRUCTION	SOLAR POWER PLANTS UNDER DEVELOPMENT	EQUIPMENT AND INTANGIBLE ASSETS	TOTAL
Carrying value at 31 December 2017	4,236.2	703.9	640.3	37.9	5,618.3
Additions	53.6	2,288.2	87.1	18.3	2,447.2
Disposals	-3.4	-	-	-0.8	-4.2
Transfer between asset classes	635.3	-83.5	-551.9	-	-
Depreciation	-179.7	-	-	-6.0	-185.7
Impairment losses	-	-	-17.0	-	-17.0
Effect of foreign exchange currency translation adjustments	-308.0	-58.0	-11.9	-1.5	-379.5
Carrying value at 30 September 2018	4,429.4	2,850.6	146.6	48.0	7,479.2
Estimated useful life (years)	20-25	N/A	N/A	3-10

Note 4 Net financial expenses and liabilities

Scatec Solar uses non-recourse financing for constructing and/ or acquiring assets, exclusively using as guarantee the assets and cash flows of the power plants carrying out the activities financed. Compared to corporate financing, non-recourse financing has certain key advantages, including a clearly defined and limited risk profile. In this respect, the banks recover the financing solely through the cash flows generated by the projects financed. For four of the five solar power companies operating in the Czech Republic and the three solar power companies in Malaysia, the non-recourse financing agreements include a cross default clause within the Czech and Malaysian group respectively.

The power plant companies' assets are pledged as security for the non-recourse financing. The repayment plan for the debt is a sculpted annuity; hence the sum of loan and interest repayments are not stable from year to year. Repayments are normally made twice a year. The maturity date for the loans ranges from 2028 to 2037. NOK 428.2 million of the Group's total non-recourse debt is due within 12 months and is presented as current in the statement of financial position. Refer to note 6 in the 2017 Annual Report for more information.

During the third quarter 2018 the Group has drawn NOK 185 million on the non-recourse financing related to the construction project in Mozambique.

During the second quarter 2018, forward exchange contracts (FEC) were set up in order to eliminate currency exchange risk in the Upington projects in South Africa. In third quarter the gain following the mark-to-market revaluation of open USD and EUR FECs amounts to NOK 44.8 million (0). The FECs are carried at fair value and fluctuate with changes in the exchange rates throughout the contract period.

NOK MILLION	Q3 2018	Q3 2017	YTD 2018	YTD 2017	FULL YEAR 2017
Interest income	15.7	11.0	37.5	40.6	50.9
Forward exchange contracts	44.8	-	168.9	-	-
Other financial income	-	-	0.1	0.2	0.4
Financial income	60.5	11.0	206.5	40.8	51.2
Interest expenses	-117.6	-116.1	-364.6	-367.0	-482.1
Other financial expenses	-3.9	-3.2	-11.6	-10.0	-41.7
Financial expenses	-121.5	-119.3	-376.3	-377.1	-523.8
Foreign exchange gains/(losses)	-21.7	-14.2	-44.1	-60.5	-59.8
Net financial expenses	-82.7	-122.5	-213,9	-396.8	-532.3

Note 5 Significant fair value measurements

Derivative financial instruments (including interest rate swaps and forward exchange contracts) are valued at fair value on Level 2 of the fair value hierarchy, in which the fair value is calculated by comparing the terms agreed under each derivative contract to the market terms for a similar contract on the valuation date. Note 11 in the annual report for 2017 provides details for each class of financial assets and financial liabilities, and how these assets and liabilities are grouped.

There are no significant changes for the presentation of these categories in the period, and there are no significant differences between total carrying value and fair value at reporting date. The presented table below summarises each class of financial instruments recognised in the condensed consolidated statement of financial position, split by the Group's basis for fair value measurement.

NOK MILLION	NON-CURRENT FINANCIAL INVESTMENTS	DERIVATIVE FINANCIAL INSTRUMENTS (ASSETS)	DERIVATIVE FINANCIAL INSTRUMENTS (LIABILITIES)	TOTAL FAIR VALUE
Fair value based on prices quoted in an active market (Level 1)	-	-	-	-
Fair value based on price inputs other than quoted prices (Level 2)	-	172.7	-13.0	159.6
Fair value based on unobservable inputs (Level 3)	-	-	-	-
Total fair value at 30 September 2018	-	172.7	-13.0	159.6

NOK MILLION	NON-CURRENT FINANCIAL INVESTMENTS	DERIVATIVE FINANCIAL INSTRUMENTS (ASSETS)	DERIVATIVE FINANCIAL INSTRUMENTS (LIABILITIES)	TOTAL FAIR VALUE
Fair value based on prices quoted in an active market (Level 1)	-	-	-	-
Fair value based on price inputs other than quoted prices (Level 2)	-	0.3	-55.2	-54.9
Fair value based on unobservable inputs (Level 3)	0.1	-	-	0.1
Total fair value at 31 December 2017	0.1	0.3	-55.2	-54.8

Note 6 Cash, cash equivalents and corporate funding

NOK MILLION	30 SEPTEMBER 2018	31 DECEMBER 2017
Cash in power plant companies in operation 1)	721.9	793.3
Cash in power plant companies under development/construction 1)	783.0	1,323.9
Other restricted cash	46.6	57.8
Free cash	489.2	688.1
Total cash and cash equivalents	2,040.7	2,863.1

1) See Alternative Performance Measures appendix for definition.

Other restricted cash comprises restricted deposits for withholding tax, guarantees, VAT and rent as well as collateralised shareholder financing of power plant companies not yet distributed to the power plant companies.

RECONCILIATION OF MOVEMENT IN FREE CASH

NOK MILLION	Q3 2018	Q3 2017	YTD 2018	YTD 2017	FULL YEAR 2017
Free cash at beginning of period	1,005.4	426.6	688.1	303.9	303.9
Proportionate share of cash flow to equity O&M	8.5	6.7	24.5	18.3	21.5
Proportionate share of cash flow to equity D&C	104.9	182.5	225.6	158.9	166.6
Proportionate share of cash flow to equity CORP	-19.5	-15.1	-61.4	-46.7	-65.3
Project development capex	-13.9	-72.5	-60.9	-189.4	-229.3
Equity contributions/collateralised for equity in power plant companies	-516.2	-224.5	-1,305.4	-239.9	-477.5
Distributions from power plant companies	54.2	50.7	187.7	140.5	150.5
Share capital increase, net after transaction cost and tax	-	-	589.6	373.0	373.0
Dividend distribution	-	-	-80.7	-73.3	-73.3
Net proceeds from bond issuance	-	-	-	-	226.7
Working capital / Other	-134.3	-178.5	282.0	-269.4	291.2
Free cash at end of the period	489.2	176.0	489.2	176.0	688.1

On 7 July 2017 Scatec Solar entered into a guarantee facility and an intercreditor agreement. The facilities replaced all other corporate guarantee facilities existing at the date of these new agreements. On 23 March 2018 Scatec Solar entered into a USD 60 million revolving credit facility and on 11 May 2018 Scatec Solar entered into a new USD 5 million overdraft facility and a USD 30 million overdraft facility was cancelled. Financial covenants are equal to the financial covenants in the NOK 750 million bond agreement in all these facilities.

The guarantee facility has Nordea Bank as agent, Nordea Bank and ABN Amro as issuing banks and Nordea Bank, ABN Amro and Swedbank as guarantee instrument lenders. The guarantee facility is established to support a growing portfolio under construction. The guarantee facility will mainly be used to provide advanced payment, performance and warranty bonds under the construction agreements, as well as for trade letter of credits. The intercreditor agreement is entered into by Scatec Solar, the issuing banks under the guarantee facility and GIEK. GIEK can issue counter indemnity in favour of the issuing banks on behalf of the relevant instrument lenders.

The revolving credit facility has Nordea Bank as agent and Nordea Bank and ABN Amro as equal Lenders and can be drawn in USD, NOK, EUR or an optional currency agreed with the banks. Revolving credit facility interest is the interbank offer rate for the drawn period and in the relevant currency plus a margin of 3.25%. Scatec Solar has not drawn on the revolving credit facility per 30 September 2018.

The overdraft facility has Nordea Bank as overdraft lender and is made available on a master top account in a group account system and can be drawn in any currency being part of the group account system. Overdraft interest is the 7-day interbank offer rate in the relevant currency plus a margin of 2.5%. Scatec Solar has not drawn on the overdraft facility per 30 September 2018.

During the fourth quarter 2017 Scatec Solar successfully completed a NOK 750 million senior unsecured green bond issue with maturity in November 2021. The bonds carry an interest of 3-month NIBOR + 4.75%, to be settled on a quarterly basis. The bond was listed on the Oslo Stock Exchange 6 April 2018 with ticker SSO02 G.

The proceeds from the bond issue was used for a full redemption of the NOK 500 million senior unsecured green bond with maturity in November 2018.

During the third quarter 2018, interest amounting to NOK 16.5 million (10.1) was expensed for the bond, overdraft- and revolving credit facility.

Per 30 September 2018, Scatec Solar was in compliance with all covenants under the NOK 750 million bond, the guarantee facility, revolving credit facility and overdraft facility. The book equity of the recourse group , as defined in the facility agreements, was NOK 2,900 million per quarter end.

Refer to bond agreement available on www.scatecsolar.com/ investor/debt for further information and definitions.

Note 7 Income tax expense

For the third quarter ended 30 September 2018 the group had an income tax expense of 24 million, equivalent to an effective tax rate of 40%. The effective income tax rate for the group is influenced by profits in higher-tax countries and losses in lower-tax countries. The tax effect of these results offset each other and cause variations in the effective tax rate of the group from quarter to quarter. The underlying tax rates in the companies in operation are in the range of 0% to 33%. In some markets, Scatec Solar receives special tax incentives

intended to promote investments in renewable energy. The effective tax rate has been and will be impacted by the volume of construction activities as the tax rate in the construction companies normally is higher than in the power plant companies. This means that the full tax expense on the internal profit will not be eliminated and hence increase the effective tax rate during construction. The opposite effect will occur when the eliminated internal profit is reversed through lower depreciation at the tax rate of the power plant company.

EFFECTIVE TAX RATE

NOK MILLION	Q3 2018	Q3 2017	YTD 2018	YTD 2017	FULL YEAR 2017
Profit before income tax	59.9	411.8	228.6	448.9	460.9
Income tax (expense)/benefit	-24.0	5.0	-78.6	-9.6	-23.0
Equivalent to a tax rate of (%)	40.0	1.2	34.4	2.1	5.0

MOVEMENT IN DEFERRED TAX

NOK MILLION	Q3 2018	Q3 2017	YTD 2018	YTD 2017	FULL YEAR 2017
Net deferred tax asset at beginning of period	219.7	220.4	217.0	199.9	200.0
Recognised in the consolidated statement of profit or loss	-44.9	10.4	-37.0	15.3	1.3
Deferred tax on financial instruments recognised in OCI	-3.6	6.8	-9.5	17.5	16.9
Recognised in the consolidated statement of changes in equity	-0.1	0,5	3.8	4.6	4.7
Offset against tax carry-back payment received	-	-	-	-	-8.5
Translation differences	-1.6	-8.9	-4.7	-8.0	2.6
Net deferred tax asset at end of period	169.5	229.3	169.5	229.3	217.0

Note 8 Dividend

For 2017, the Board of Directors proposed a dividend of NOK 0.78 per share, totalling NOK 80.7 million. The General Meeting resolved the Board's proposal of a dividend of NOK 0.78 per share. The share traded excluding dividend rights

(ex-date) on the first business day following the Annual General Meeting held 23 April 2018. The dividend was paid on 14 May 2018.

Note 9 Current and non-current assets/liabilities – related parties

NOK MILLION	30 SEPTEMBER 2018	31 DECEMBER 2017
Other non-current assets
Loans to non-controlling interests	66.0	79.3
Loans to key management personnel	3.4	5.8
Other non-current receivables	91.9	34.9
Total other non-current assets	161.3	120.0
Other current assets
Receivables from public authorities/prepaid taxes, VAT etc	186.5	137.5
Receivables related to assets under development/construction	85.9	321.6
Other receivables and prepaid expenses	142.6	99.4
Total other current assets	415.0	558.5
NOK MILLION	30 SEPTEMBER 2018	31 DECEMBER 2017
Other non-current liabilities
Shareholder loan from non-controlling interests	508.8	128.2
Other liabilities to non-controlling interests and partners	114.9	65.6
Other non-current liabilities	94.9	105.6
Total other non-current liabilities	718.6	299.4
Other current liabilities
Accrued payroll to key management personnel	4.3	5.9
Accrued expenses related to assets under development/construction	320.5	66.4
Current liabilities to non-controlling interest	82.0	108.6
Public dues other than income taxes	34.1	79.1
Accrued payroll	31.1	27.4
Other accrued expenses	249.7	69.2
Total other current liabilities	721.7	356.5

Scatec Solar has related party transactions and balances with Scatec Solar Brazil, mainly a loan of NOK 127 million that is included in the Investments in JVs according to the equity method. In addition, Scatec Solar has transactions and balances with key management as specified in the tables above.

All related party transactions have been carried out as part of the normal course of business and at arm`s length. For further information on project financing provided by co-investors, refer note 25 to the 2017 annual financial statements.

Note 10 Trade and other payables

The consolidated trade and other payables of NOK 260.7 million mainly consist of construction related supplier credits. Consequently, the balance is affected by the activity level in the Development & Construction segment. The increased

payables at 30 September 2018 compared to 31 December 2017 of NOK 44.3 million, reflects purchases of construction material to mainly Quantum projects in Malaysia, offset by general down-payments in the third quarter.

Note 11 Earnings per share and capital increase

During second quarter 2018 Scatec Solar successfully raised NOK 600 million through a private placement consisting of 10 million new shares at a price of NOK 60 per share. Total transaction cost for the capital increase is recognized in equity and amounted to NOK 10.4 million after tax.

Earnings per share is calculated as profit/(loss) attributable to the equity holders of the parent company divided by the average number of shares outstanding.

Diluted earnings per share is affected by the option program for equity-settled share-based payment transactions established in October 2016, see note 26 Employee benefits in the Annual report 2017.

NOK MILLION	Q3 2018	Q3 2017	YTD 2018	YTD 2017	FULL YEAR 2017
Basic earnings per share
Profit/(loss) attributable to the equity holders of the parent company and for the purpose of diluted shares	14.4	383.0	94.5	374.0	339.1
Weighted average number of shares (million) outstanding for the purpose of basic earnings per share	113.4	103.2	107.2	100.3	101.1
Earnings per share for income attributable to the equity holders of the parent company - basic (NOK)	0.13	3.71	0.88	3.73	3.36
Diluted earnings per share
Weighted average number of shares(million) outstanding for the purpose of diluted earnings per share	113.7	103.4	107.5	100.5	101.3
Earnings per share for income attributable to the equity holders of the parent company - diluted (NOK)	0.13	3.70	0.88	3.72	3.35

Note 12 Subsequent events

No events have occurred after the balance sheet date with significant impact on the interim financial statements for the third quarter 2018.

In August 2018, Scatec Solar announced an increase in the ownership share in the Kalkbult, Linde and Dreunberg power plants in South Africa from 39 % to 45 %. Scatec Solar and STANLIB, both existing shareholders, were purchasing all of Norfund's 21 % shares in the solar plant Kalkbult, and KLP Norfund's 16 % shares in Linde and Dreunberg. Scatec Solar acquired 33 % of the shares and STANLIB acquires the balance of the shares. The total capacity of the plants is 190 MW. Final closing of the transaction is expected to take place in October 2018, hence the third quarter financial statements are not affected by the transaction.

In October, Scatec Solar announced that the company has secured two new projects with a total capacity of 121 MW in Ukraine.

The projects will be realised under the country's Feed-in-Tariff (FiT) scheme and the solar power plants are expected to produce about 155,000 MWh per year in total. Land will be leased for an extended time-period from local municipalities and the plants are expected to deliver power also beyond the 10-year FiT period.

Total capex for the projects is estimated to EUR 137 million. Grid connection of the plants is expected towards the end of 2019.

Alternative Performance Measures

Scatec Solar discloses alternative performance measures (APMs) in addition to those normally required by IFRS. This is based on the Group's experience that APMs are frequently used by analysts, investors and other parties for supplemental information.

The purpose of APMs is to provide an enhanced insight into the operations, financing and future prospect of the Group. Management also uses these measures internally to drive performance in terms of long-term target setting. APMs are adjusted IFRS measures that are defined, calculated and used in a consistent and transparent manner over the years and across the Group where relevant.

Financial APMs should not be considered as a substitute for measures of performance in accordance with the IFRS. Disclosures of APMs are subject to established internal control procedures.

Definition of alternative performance measures used by the Group for enhanced financial information

Book equity: is the total book equity of the recourse group less investments in subsidiaries within the recourse group at the end of any relevant period and in accordance with IFRS. In case a subsidiary is not wholly owned, the book equity of that subsidiary is adjusted to reflect the issuer's pro rate ownership of the book equity in that subsidiary.

Book equity ratio: is defined as total equity divided by total assets.

Cash flow to equity: is a measure that seeks to estimate value creation in terms of the company's ability to generate funds for equity investments in new solar power plant projects and/or for shareholder dividends over time. The measure is defined as EBITDA less normalised loan and interest repayments, less normalised income tax payments. The definition excludes changes in net working capital, investing activities and fair value adjustment of first-time recognition of joint venture investments.

EBIT: is defined as earnings before interest and tax and corresponds to operating profit in the consolidated statement of profit or loss.

EBIT margin: is defined as EBIT divided by total revenues and other income.

EBITDA: is defined as operating profit adjusted for depreciation, amortisation and impairments.

EBITDA margin: is defined as EBITDA divided by total revenues and other income.

Gross interest-bearing debt: is defined as the Group's total debt obligations and consists of non-current and current external non-recourse financing and external corporate financing, irrespective of its maturity as well as bank overdraft and discounted notes.

Gross margin: is defined as total sales revenue including net gain/loss from sale of project assets and net gain/loss from associates minus the cost of goods sold (COGS) divided by total sales revenue, expressed as a percentage. The gross margin represents the percentage of total sales revenue that the Group retains after incurring the direct costs associated with producing the goods and services.

Net gain project sale: is defined as sales revenue less costs from sale of project assets.

Net interest-bearing debt (NIBD): is defined as total interest-bearing debt, less cash and cash equivalents. NIBD does not include shareholder loans.

Net interest expense: is defined as interest income less interest expenses, excluding shareholder loan interest expenses and accretion expenses on asset retirement obligations.

Normalised loan repayments: are calculated as the annual repayment divided by four quarters for each calendar year. However, loan repayments are normally made bi-annually. Loan repayments will vary from year to year as the payment plan is based on a sculpted annuity.

Normalised income tax payment: calculated as operating profit (EBIT) less normalized net interest expense multiplied with the nominal tax rate of the jurisdiction where the profit is taxed.

Net working capital includes trade- and other receivables, other current assets, trade- and other payables, income tax payable, other current liabilities and intercompany receivables and payables.

Recourse Group means all entities in the group, excluding solar park companies (each a recourse group company).

Scatec Solar's economic interest: Scatec Solar's share of the total estimated economic return from its subsidiaries. For projects in development and construction the economic interest is subject to change from the development of the financial model.

SSO Proportionate Financials

Calculates proportionate revenues and profits for Scatec Solar based on its economic interest in the subsidiaries. The Group introduced SSO Proportionate Financials as the Group is of the opinion that this method improves earnings visibility. The consolidated revenues and profits are mainly generated in the Power Production segment. Activities in Operation & Maintenance and Development & Construction segment mainly reflect deliveries to other companies controlled by Scatec Solar (with from 39% to 100% economic interest), for which revenues and profits are eliminated in the Consolidated Financial Statements.

Break-down of proportionate cash flow to equity

Q3 2018

NOK MILLION	POWER PRODUCTION	OPERATION & MAINTENANCE	DEVELOPMENT & CONSTRUCTION	CORPORATE	TOTAL
EBITDA	126.6	10.9	130.5	-11.4	256.5
Net interest expenses	-35.8	-	0.4	-14.2	-49.6
Normalised loan repayments	-32.7	-	-	-	-32.7
Normalised income tax payment	-11.4	-2.4	-26.0	6.1	-33.7
Cash flow to equity	46.6	8.5	104.9	-19.6	140.4

Q2 2018

NOK MILLION	POWER PRODUCTION	OPERATION & MAINTENANCE	DEVELOPMENT & CONSTRUCTION	CORPORATE	TOTAL
EBITDA	120.8	18.9	140.1	-13.8	266.0
Net interest expenses	-40.6	-	0.3	-16.2	-56.5
Normalised loan repayments	-33.9	-	-	-	-33.9
Normalised income tax payment	-9.9	-4.3	-32.0	7.0	-39.2
Cash flow to equity	36.5	14.6	108.3	-23.0	136.4

YTD 2018

NOK MILLION	POWER PRODUCTION	OPERATION & MAINTENANCE	DEVELOPMENT & CONSTRUCTION	CORPORATE	TOTAL
EBITDA	353.1	31.6	286.0	-39.1	631.5
Net interest expenses	-118.4	-	1.0	-41.0	-158.4
Normalised loan repayments	-99.4	-	-	-	-99.4
Normalised income tax payment	-26.3	-7.1	-61.4	18.8	-76.0
Cash flow to equity	109.0	24.5	225.6	-61.4	297.7

Q3 2017

NOK MILLION	POWER PRODUCTION	OPERATION & MAINTENANCE	DEVELOPMENT & CONSTRUCTION	CORPORATE	TOTAL
EBITDA	118.8	8.8	383.6	-11.0	500.3
Adjustments 1)	-	-	-199.4	-	-199.4
Adjusted EBITDA	118.8	8.8	184.2	-11.0	300.9
Net interest expenses	-41.6	-	0.3	-9.1	-50.4
Normalised loan repayments	-27.5	-	-	-	-27.5
Normalised income tax payment	-7.7	-2.1	-1.9	4.9	-6.8
Cash flow to equity	42.2	6.7	182.6	-15.1	216.4

1) Adjustments include changes in net working capital, investing activities and fair value adjustment of first time recognition of joint venture investments.

YTD 2017

NOK MILLION	POWER PRODUCTION	OPERATION & MAINTENANCE	DEVELOPMENT & CONSTRUCTION	CORPORATE	TOTAL
EBITDA	347.4	23.9	350.7	-35.3	686.6
Adjustments 1)	-	-	-199.4	-	-199.4
EBITDA	347.4	23.9	151.3	-35.3	487.3
Net interest expenses	-129.7	-	1.6	-26.5	-154.6
Normalised loan repayments	-85.3	-	-	-	-85.3
Normalised income tax payment	-20.2	-5.9	5.7	14.8	-5.6
Cash flow to equity	112.5	18.4	158.9	-46.6	243.2

1) Adjustments include changes in net working capital, investing activities and fair value adjustment of first-time recognition of joint venture investments.

Other definitions

Backlog

Project backlog is defined as projects with a secure off-take agreement assessed to have more than 90% probability of reaching financial close and subsequent realisation.

Cash in power plant companies in operation

Restricted cash in proceed accounts, debt service reserve accounts, disbursements accounts, maintenance and insurance reserve accounts and similar. These cash and cash equivalents are only available to the Group through distribution as determined by shareholder and non-recourse financing agreements.

Cash in power plant companies under development/construction

Comprise shareholder financing and draw down on term loan facilities by power plant companies to settle outstanding external EPC invoices.

Definition of project milestones

Commercial Operation Date (COD): A scheduled date when certain formal key milestones have been reached, typically including grid compliance, approval of metering systems and technical approval of plant by independent engineers. Production volumes have reached normalised levels sold at the agreed off-taker agreement price. This milestone is regulated by the off-taker agreement with the power off-taker.

Financial close (FC): The date on which all conditions precedent for drawdown of debt funding has been achieved and equity funding has been subscribed for, including execution of all project agreements. Notice to proceed for commencement of construction of the solar power plant will normally be given directly thereafter. Projects in Scatec Solar defined as "backlog" are classified as "under construction" upon achievement of financial close.

Start of Production (SOP): The first date on which the solar power plant generates revenues through sale of power under the off-take agreement. Production volumes and/or the price of the power may be lower than when commercial operation date (COD) is reached. This milestone is regulated by the off-take agreement with the power off-taker. This milestone may be reached prior to COD if the construction of a power plant is completed earlier than anticipated in the off-take agreement.

Take Over Date (TOD): The date on which the EPC contractor hands over the power plant to the power plant company. COD must have been reached, in addition to delivery of training and all technical documentation before TOD takes place. The responsibility for Operations & Maintenance (O&M) of the plant is handed over from the EPC contractor to the O&M contractor at the TOD. This milestone will normally occur shortly after the COD date.

Pipeline

Project pipeline is defined as projects that do not yet have a 90% probability of reaching financial close and subsequent realisation. However, the company has verified feasibility and business cases for the projects.

Project equity

Project equity comprise of equity and shareholder loans in project companies.

Third quarter 2018

Scatec Solar's Value Chain

Project development

• Site development

• System design • Business case

• Permitting
• Grid connection
• PPA negotiation /tender / FiT

Financing

• Component tendering
• Debt / Equity structuring
• Due Diligence

Construction

• Engineering and Procurement
• Construction management
• Quality assurance

Operations

• Maximize performance and availability
• Maintenance and repair

Ownership (IPP)

• Asset management
• Financial and operational optimization

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