The Norwegian Renewable energy company alongside its partners Hydro Rein and Equinor will build the solar power project in Rio Grande do Norte state in Brazil and will each hold a stake of 33.3% and jointly deliver EPC services
Scatec and its partners Equinor and Hydro Rein have started construction activities at the 531MW Mendubim solar project in Brazil, which involves an investment of $430m.
The solar power project is being built in Rio Grande do Norte state. It is underpinned by a power purchase agreement (PPA) signed with Alunorte, which is Norsk Hydro’s alumina refinery located in Para.
Under the 20-year USD-denominated PPA, Alunorte will procure nearly 60% of the power produced by the Mendubim solar project. The remaining 40% of the electricity generated will be sold in the Brazilian power market.
Scatec CEO Terje Pilskog said: “This investment is a key milestone in delivering on our strategy and will strengthen our position in a major renewable energy growth market with strong partners including Equinor and Hydro Rein.
“Brazil’s solar energy market is expected to further accelerate, and we are pleased to move ahead with this exciting project, that will help to power 620,000 households in Brazil.”
Scatec, Equinor, and Hydro Rein are currently placing orders for major components of the Brazilian solar project and are commencing site preparation activities. The trio will finance the capital expenditure of the project through a combination of non-recourse project debt and equity.
According to Scatec, financial close and the first payment of project finance debt are anticipated by the end of this year.
All three partners will each hold a stake of 33.3% in the Mendubim solar project. They will jointly deliver engineering, procurement, and construction (EPC) services as well.
Scatec said that it will provide operation and maintenance along with asset management services to the power plant alongside its partners.
Hydro Rein head Olivier Girardot said: “Brazil is leading the way within solar energy in Latin America, and we are very pleased to take part in this development together with Equinor and Scatec. Mendubim enables further decarbonisation of Alunorte, which is key to reach Hydro’s target of a 30% CO2 reduction by 2030.”