MIGA’s goal is to promote foreign direct investment into developing countries to support economic growth and more.

Explore different types of political risk insurance guarantees provided to investors and lenders.

Explore global projects that support economic growth, reduce poverty and improves people’s lives.

Learn about the progress MIGA is making in its mission to support economic growth, reduce poverty and improve people’s lives.

Stay Connected
x
South Africa

Scatec Solar South Africa

$34.56 million
Power
Project Brief
Active
solar grass

Project Facts

Project Facts

Project Facts

South Africa
Strategic Priority Area
Energy efficiency and climate change
Guarantee Holder
Scatec Solar ASA or any of its subsidiaries
Investor Country
Netherlands
Norway
South Africa
Environmental Category
B
Date SPG Disclosed
June 08, 2018
Projected Board Date
July 20, 2018
Project Type
Non-SIP

Project Description

On September 27, 2018, MIGA agreed to issue up to $34.56 million in guarantees covering Scatec Solar ASA's (Scatec) equity investments in six Solar Photovoltaic (PV) power plants in the Northern and Eastern Cape Provinces of South Africa. The guarantees are issued for 15 years against the risks of Breach of Contract (BoC) and Transfer Restrictions & Convertibility (TR).

The project consists of the construction, ownership, and operation and maintenance of six Solar PV energy generating facilities in South Africa, as part of the government’s Renewable Energy Independent Power Procurement Program (REIPPP). Three of the facilities, Kalkbult (75 MW), Dreunberg (75 MW) and Linde (40 MW) have been in operation since 2013 and 2014; while the Sirius (75 MW), Dyason’s Klip 1 (75 MW) and Dyason’s Klip 2 (75 MW) solar power projects reached their financial close in April 2018. Construction is expected to commence in the fourth quarter of calendar 2018.

Environmental Categorization

The projects are a category B under MIGA’s Policy on Environmental and Social Sustainability; for more information, please refer to the Environmental and Social Review Summary documents for rounds one and two, as well as round four of the project.

Development Impact

The projects will generate climate mitigation benefits by increasing renewable energy capacity and solar power’s contribution to the energy mix in South Africa. The projects have an array of Economic Development Obligations enshrined in its legal agreements which include undertakings to 1) ensure minority shareholding in the project companies by local communities and economically disadvantaged groups; 2) create jobs with training and career development opportunities; 3) procure local content; and 4) contract with micro, small and medium-enterprises, women-owned, and ethnically minority-owned companies. The projects are required to track and report its socio-economic development contributions as a percentage of revenues on a quarterly basis.