AFRICA – Scatec Solar has signed a binding agreement to acquire 100% of the shares in SN Power, a leading hydropower developer and IPP from Norfund for a total equity value of US$ 1,166 million.

The acquisition forms an important part of Scatec Solar’s broadened growth strategy with an ambition to become a global large-scale player in solar, hydro, wind and storage solutions and an integrator of high-value infrastructure solutions.

Scatec Solar and SN Power have a unique and complementary portfolio of assets, geographical footprint and capabilities and will together hold a large project pipeline across solar, hydro, wind and storage.

The combined company will have 450 employees, power plants in 14 countries and gross 3.3 GW of plants in operation and under construction.

 When all plants are in full operation from early 2021, the median annual production is expected to be 4.1 TWh.

“Hydropower and solar PV are complementary technologies resulting in new project opportunities, for instance floating solar on hydro reservoirs. With this transaction we see great potential in broader project origination and geographical expansion into growth markets in South East Asia and Sub-Sahara Africa. SN Power adds scale and significant cash flow from operating plants and will raise stakeholder value; benefiting customers, employees, shareholders, business partners and the societies in which we operate,” says Raymond Carlsen, CEO of Scatec Solar.

“Norfund’s investment in SN Power has contributed to job creation, improved living conditions and avoided carbon emissions. By mobilising private capital in SN Power, we can recycle significant funds for new investments, demonstrating the effectiveness of using development aid to invest in clean energy in developing countries,” says Tellef Thorleifsson, CEO of Norfund.

Transaction involves SN Power’s portfolio of hydropower assets in the Philippines, Laos, and Uganda with a total gross capacity of 1.4 GW (net 0.5 GW) and gross median production of 6.1 TWh (net 1.8 TWh).

Currently, SN Power has a project pipeline totalling gross 2.5 GW mainly across Asia and Sub-Saharan Africa and Scatec Solar will further accelerate growth and have a combined project pipeline of 9.5 GW across solar, hydro, wind and storage.

Norfund, the Norwegian Investment Fund for developing countries has been a long-term partner of Scatec Solar in a successful private-public partnership.

As part of this transaction, the parties will establish a new joint venture for SN Power’s Sub-Saharan Africa hydro assets and to develop the hydropower pipeline in the region.

 Norfund will retain a 49% stake and Scatec Solar to hold 51% in the Joint Venture and Scatec Solar will be the operator.

With SN Power, Scatec Solar will strengthen its position as a partner for governments and communities that are seeking economic growth.

 The Company will also be more relevant for corporate customers seeking cleaner and more affordable energy and for shareholders who wish to position themselves in the rapidly growing renewable energy space.

The transaction is conditional upon customary regulatory approvals and local competition approvals and is likely to be completed in the first half of 2021 but until then, the two companies will continue to operate as separate entities.

Integration preparations will start immediately and Scatec Solar will continue to be listed on Oslo Stock Exchange (Oslo Børs) and intends to change its name to Scatec.

Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE