Renewable-energy company Scatec on August 2 signed an agreement with Stanlib Infrastructure Fund II subsidiary, Greenstreet 1, to sell part of its ownership in the Kalkbult, Linde and Dreunberg solar power plants, with a total capacity of 190 MW, for a gross consideration of R921-million.

Kalkbult and Linde are located in the Northern Cape, and Dreunberg in the Eastern Cape.

Scatec currently holds an economic interest of about 46% in the Kalkbult and 44% in the Linde and Dreunberg solar power plants.

Stanlib currently holds a minority interest in these solar power plants.

The transaction will be conducted through a two-step process, whereby Scatec will sell down to about 13% in Kalkbult and 12% in Linde and Dreunberg.

The first phase of the transaction is estimated to close in the second half of the year and the second phase in the first half of 2025.

Closing of the transaction is subject to customary consents, including lender, shareholder and regulatory authority approvals.

The accounting effects will be disclosed at closing of the transaction.

Scatec says it remains committed to long-term investment in South Africa and will continue to provide operations and maintenance and asset management services to the three facilities, which were won under Rounds 1 and 2 of South Africa’s Renewable Energy Independent Power Producer Procurement Programme.

“This transaction signifies continued implementation of our strategy to recycle capital into new investments in renewable energy. We are very pleased to secure a value-accretive transaction and are confident that Stanlib, who has been invested in the assets since inception, will be a solid majority owner of the asset going forward,” says Scatec CEO Terje Pilskog.

“Having been in South Africa for over a decade, we have grown into a leading renewable-energy player in the country. South Africa will continue to remain a core growth market for us, and we will continue to build scale through new investments, including the Grootfontein solar projects under construction, the Mogobe battery storage project, and through Lyra Energy, our private-sector-focused vehicle,” he adds.

“We have high confidence in this investment and are pleased to increase our exposure to quality assets in our growing portfolio of renewable-energy projects,” says Stanlib Infrastructure Investments analyst Muhammed Munshi.

“Our familiarity with these solar plants, having been shareholders prior to their construction, ensures that this investment aligns seamlessly with our mandate to provide investors with diversified, stable and risk-appropriate returns.

“Moreover, it enhances our exposure to an asset class that acts as a powerful catalyst for economic growth and positively impacts South African communities,” he adds.