November 1 (Renewables Now) - The Multilateral Investment Guarantee Agency (MIGA), part of the World Bank Group, said today it has issued guarantees covering 90% of the investments by Norway’s Scatec Solar ASA (OSL:SSO) in six photovoltaic (PV) power plants in South Africa.
According to MIGA’s website, the guarantees are worth up to USD 34.56 million (EUR 30.4m). They are issued for 15 years against the risks of Breach of Contract and Transfer Restrictions and Convertibility.
The guarantees cover the construction, ownership, operation and maintenance of three plants that have been in operation since 2013 and 2014 -- the 75-MW Kalkbult, 75-MW Dreunberg and 40-MW Linde projects, and three that are currently under construction -- the 75-MW Sirius, 75-MW Dyason’s Klip 1 and 75-MW Dyason’s Klip 2.
The six projects have been realised thanks to the South African Renewable Energy Independent Power Procurement Program (REIPPP) and will sell their electricity to South Africa's state-owned utility Eskom under 20-year power purchase agreements (PPAs). KLP Norfund also has a stake in the power plants, as do broad based trusts designed to finance local community initiatives.
"By covering not only greenfield, but also brownfield projects, we are encouraging additional investments in renewable power," said MIGA executive vice president and chief executive Keiko Honda.
"These MIGA guarantees are a cost-efficient way of mitigating risk in an important part of our asset portfolio," said Scatec Solar chief executive Raymond Carlsen.
Among the project lenders are South African financial institutions such as the Standard Bank of South Africa, Sanlam Life Insurance and the Development Bank of Southern Africa.
(USD 1 = EUR 0.879)