Scatec ASA

Regulatory Filings • Oct 26, 2015

Scatec Solar launches field activities in Egypt

Scatec Solar launches field activities in Egypt

Oslo, October 26: While the Egyptian authorities engage in finalizing contract

documents related to the renewable program, the Norwegian solar power producer,

Scatec Solar, has launched a series of activities on the ground to contribute to

the timely construction of what surely will be one of the world's largest solar

energy sites.

Scatec Solar (SSO) has begun engineering and procurement related activities in

Benban and Zafarana, the two solar sites located in interior Egypt. "Topography"

and "Geotechnical" studies have already been completed, work has commenced on

the Environmental and Social Impact Assessment and weather stations are being

installed at the two sites to measure solar irradiation, heat, dust, sand and

other air quality conditions that will impact the future efficiency of the solar

projects.

"Our international experience has taught us the importance of detailed pre-

planning for execution of projects so that we can quickly deliver much-needed

electricity, once the authorities have issued all the agreements and permits,"

said Raymond Carlsen, CEO of Scatec Solar, an integrated Independent Power

Producer (IPP), with a proven track record for building, owning and operating

solar energy plants in the United States, Europe, Africa and Latin America.

In order to fulfill Egypt's solar plans, Dr. Mohamed El Sobki, Chairman of

Egypt's  New and Renewable Energy Authority (NERA)  said the government will

"adopt new polices and issue the required legislation to attract international

participation and investment". He was speaking in an exclusive interview to

Advanced Conferences and Meetings ahead of its major conference in Cairo titled

"Implementing strategies to finance, construct and operate solar plants in

Egypt." Government officials and key private sector players will participate in

the conference, which is part of the push to operationalize Egypt's pioneering

solar energy program. "Our plan to invest more than USD 600 Million in Egypt's

solar energy program over the next two years will be a significant boost to

Egypt's economy," said Terje Osmundsen, Scatec Solar's Senior Vice President for

Business Development, who is speaking at the conference.

Scatec Solar (SSO) has signed agreements to participate in five projects

totaling 250 MW (AC) under Egypt's new FiT photovoltaic program.  One of the

biggest players in Egypt's new solar program, SSO will be the lead developer in

one project, while in four others it will participate as strategic investor, EPC

and O&M provider. The company has initiated the process to raise project finance

from banks, though fund commitments rest on the authorities issuing bankable

contractual documents and required permits.

To meet the rapidly rising demand for electricity, Egypt decided to diversify

its energy mix and invited foreign solar energy developers to construct 2.3 GW

utility-scale solar plants in the next two years. Said CEO Raymond "The

determination with which the Government is pursuing solar energy matches the

fundamentals of the economy that require more electricity to promote economic

growth, provide clean energy and create more jobs." As part of SSO's corporate

philosophy, training will be provided and skills transferred to the local

population during the construction of solar plants, which generates hundreds of

jobs, as well as for the subsequent operation and maintenance of the projects.

SSO's Kalkbult project in South Africa, the first and biggest solar plant in the

whole African continent when it was built, was commissioned three months ahead

of schedule with zero accidents using local labour.

To support its activities in Egypt, Scatec Solar has decided to establish a

regional headquarter located in Cairo's Nile City Tower. "The first big PV

development in Egypt is a great opportunity for the country and for SSO. We will

deliver on our commitments in the timeline and frameworks set by our

stakeholders," said Pål Helsing, head of SSO's Egypt operations.  SSO has

appointed Fedicom Trading and Engineering LLC to be its local development

partner.

As an IPP, Scatec Solar takes responsibility not only for developing, financing

and building solar power plants, but also for its long term operation and

maintenance. SSO's experience in Honduras, Jordan, Rwanda, South Africa and the

United States shows that incorporating the particularities of the local terrain

and weather conditions at the design stage is vital for the plants' sustained

durability and success.  Said Carlsen. "All our stakeholders - the local

authorities, consumers, banks and investors - want solar plants to perform

successfully to deliver electricity and revenue for 20 years. Solid engineering

and construction design is vital to ensure that."

Currently, SSO's internal teams are fully engaged in processes with regard to

finance, development and EPC activities relating to logistics, sub-contracting,

infrastructure and supplies. Workshops have been held in Cairo to conduct

Stakeholder Analysis as part of the company's integrated, solution-oriented

approach to implementing solar projects.  "We share our experiences and lessons

learnt in setting up solar plants so that our strategic partners, sub

contractors and suppliers in Egypt can acquire capability to build PV plants and

be part of this journey" said Carlsen.

To make Egypt's new solar policy a success, capacity building and field level

coordination is required among the 40 solar developers at each of the two

sites.  Using its past experience and in keeping with its collaborative style of

functioning, SSO is currently taking the lead  together with other  developers

for setting up a "one stop shop" arrangement with regard to simplifying

logistics to avoid delay-causing bottlenecks during the construction phase.

Streamlining logistics will improve cost-effectiveness, efficiency and safety,

thus benefitting all the developers in the two solar parks. Both Benban and

Zafarana are located relatively far from common industrial service providers and

the needed infrastructure.

By 2022, Egypt plans to supply 20 percent of installed capacity from renewable

energy.  Over the next seven years, the foreign investments required to build

the planned 6 GW of solar will be about USD 9 -10 billion. As solar plants run

on sun energy, which is free and abundant, initial investments are offset by

huge gains made by avoiding the import of fossil fuel to run power stations.

Imported fuel is expensive, polluting and a drain on precious foreign exchange

reserves. In addition, PV plants are rapidly constructed, safe, noiseless and

clean, involving zero carbon emissions. Furthermore, tariffs for PV plants are

affordable and predictable as there are no turbulences caused by fluctuations in

oil prices or currency valuations. Based on a study conducted by the Council for

Scientific and Industrial Research, South Africa gained USD 30 million from

SSO's three solar plants in the first six months of this year alone. The gains

came from avoiding production losses due to power outages and savings from not

having to import fossil fuel.

About Scatec Solar:

Scatec Solar is an integrated independent power producer, aiming to make solar a

sustainable and affordable source of energy worldwide. Scatec Solar develops,

builds, owns and operates solar power plants and delivers power from 219 MW in

the Czech Republic, South Africa and Rwanda. The company is in strong growth and

has 207 MW under construction in the US, Honduras and Jordan as well as a solid

pipeline of projects under development in Africa, Middle East, Americas and Asia

For further information, please contact:

Oslo HQ: Mr Terje Osmundsen, Senior Vice President

+47 909 23 696 / terje.osmundsen@scatecsolar.com

Pål Helsing, Director, Egypt

+47 476 12 564/  pal.helsing@scatecsolar.com

Investor enquiries:

Mr. Mikkel Tørud, CFO

+47 976 99 144/ mikkel.torud@scatecsolar.com

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