Developing solar in emerging markets
Pareto Conference January 14, 2016
Our values
- Predictable
- Driving results
- Change makers
- Working together
Scatec Solar - an independent solar power producer
An independent solar power producer
- SSO develops, builds and operates large scale solar plants
- Present in South Africa, Czech Republic, Rwanda, USA, Honduras and Jordan + global business development
Experienced and fast-growing
- Project track record of close to 600 MW
- 383 MW in operation and 43 MW under construction
- Focus on growth in emerging solar markets
- Project backlog and pipeline of ~1.6 GW
- Additional project opportunities of ~2.3 GW
Integrated across the downstream value chain
- Generating margins through all project stages
- Assets with strong and predictable long-term cash flows
383 MW / ~1.2 NOK billion annual revenues for 20 years
A solid project funnel – basis for further growth
426 MW IN OPERATION / UNDER CONSTRUCTION • Feasibility and business case verified
Regions
Americas, Africa, MENA, Asia, Oseania
- Land secured
- Grid connection available
- Preliminary design completed
- PPA/FiT through tender or negotiations likely
- PPA signed / FiT secured
- Grid connection secured
- All main permits in place
- Project financing the only milestone outstanding
Regions
Americas, East and West Africa, South Africa, Egypt, Pakistan
Regions
South Africa, Mali, Honduras
Cash generated from construction, ownership & ops.
(*) Cash flow to equity is defined as EBITDA less normalised (i.e. average over each calendar year) loan and net interest repayments, less normalised income tax payments. The definition implies changes in net working capital and investing activities are excluded from the figure.
The solar market opportunity is significant
Annual new installed capacity per year
Source: Bloomberg New Energy Finance, Q4 2015 PV market outlook, optimistic forecast
Cost of solar continues to decline
Total system cost for a 1 MW, fixed tilt system (USD/Watt)
…and it creates jobs
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Bioenergy
(Biomass, Biofuels,
Biogas) |
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Geothermal |
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Hydropower
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Solar Energy
(Solar PV, CSP,
Solar Heating/Cooling) |
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Wind Power |
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$= 50,000$ jobs |
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REN21
$ \approx $
人 |
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World Total: 7.7 Million Jobs |
Job creation and local community development - a very important factor for policymakers in emerging markets when implementing renewables programs
Attractive opportunities in emerging solar markets
- Economic growth is restrained by lack of power supply – or by fuel dependent expensive power
- The power deficits are significant and grid capacity available
- Excellent solar irradiation
- The IPP model is often established for infrastructure investments
- Public/private partnerships secures capex financing
- private developers
- multilateral development banks
Scatec Solar - our recipe
Key ingredients:
- Market understanding and penetration
- Access to financing
- Regulatory framework and legal set up
- Project development and execution
- Operation and asset management
- Corporate Social Responsibility
- Security
Norfund partnership:
- Project development and investment partnerships in various regions
- Norfund and KLP is equity co-investors in South Africa, Rwanda and Honduras
IFC partnership:
• Project development and investment partner in selected countries in West Africa
Project finance partners
- IFC, GIEK, EksportKreditt, FMO, EBRD, Proparco, Cifi multilateral development banks and institutions providing long term non-recourse project finance
- Standard Bank and partners providing project finance to plants in South Africa
Key benefits:
- Access to lower cost of capital
- Expanded network for project origination
- Risk mitigation representing the Norwegian government, the World Bank and key local financial and government partners
Simplified illustration of company structure and main contracts in place
CSR and local economic development
- Economic development of rural areas is often a critical part of the renewables program
- Job creation is the most important factor both directly through construction and operation jobs, and indirectly through local content targets
- Strong community relations critical to ensure successful execution
- In South Arica Economic Development commitments and strategy over 20 years are made as part of the bid documents
- For Scatec Solar projects total community contributions in South Africa totals NOK 1.2 billion over a 20 year period; a significant contribution to the scarcely populated regions
- Specialist advisors engaged to manage CSR and ED programs
Scatec Solar is well positioned for the future
- Established diversified asset base with stable cash generation for the next 20 years
- Solid project pipeline for further growth over the coming years
- Track record and business model that enables execution in complex emerging solar markets
- Competitiveness of solar continues to improve and it will change the power market significantly
Thank you
Our values
- Predictable
- Driving results
- Change makers
- Working together