13 December 2023: Release by Scatec (Release), has signed a USD 100 million loan agreement with the World Bank’s International Finance Corporation (IFC). The loan agreement is part of a larger partnership to provide a simpler, more affordable, and cleaner offering of power to African utilities, which also includes a USD 65 million guarantee facility to support the payment obligations of Release’s customers. The objective is to replace costly diesel and expand electrification in the region.
Release operates on a unique leasing model, providing flexible short- or long-term contracts for the mining and utilities market, primarily in Africa, based on modular, movable and redeployable equipment.
IFC is the largest global development institution renowned for its instrumental role in supporting private sector development, and the loan from IFC will provide funding on a portfolio level for Release’s further development and installation of assets to be leased to African utilities.
The purpose of the guarantee facility is to guarantee payments to Release from the counterparties leasing the solar and battery equipment. The structure provides risk mitigation for Release while allowing African utilities and governments to secure affordable renewable energy from solar and batteries, without the financial commitment required for the conventional infrastructure projects. The partnership with IFC will thereby represent a significant catalyst for further growth of the Release platform.
The first project where the combined project loan and guarantee structure will be applied is for a 35 MW solar and 20 MWh battery project in N’djamena in Chad, where a lease contract has already been signed. Release’s existing and operating projects in Northern Cameroon of 36 MW of solar PV and 20 MWh of batteries will also form part of the portfolio financing and discussions on extending the capacity of these projects are currently ongoing with the utility.
“This highly innovative solution enables countries to deploy solar power projects quickly, allowing African countries to swiftly ramp up to meet rising energy demand with clean power solutions,” said Sarvesh Suri, IFC’s Regional Industry Director for Infrastructure and Natural Resources, Africa. “Our ambition is to deploy this replicable solution, in partnership with Release in multiple countries across sub-Saharan Africa within a short timeframe, allowing more people to benefit from the economic growth that comes with reliable, affordable access to electricity.”
“I am delighted that, through this partnership between Scatec and IFC, Chad has been chosen as the first country to benefit from a solar power plant to support the government’s efforts to meet the energy access needs of our populations,” said Alixe Naïmbaye, Minister of Hydrocarbons and Energy of Chad. “In addition, the liquidity guarantee facility granted by the World Bank to Société Nationale d’Electricité underlines the strong commitment of the World Bank Group to facilitating partnerships with private investors.”
“We are excited to secure the partnership with IFC for our innovative solar leasing solution Release. IFC’s support is testimony to the solid business model of Release, the general demand and need for such an innovative solution in the market and our proven track record in developing renewable energy solutions,” says Scatec CEO, Terje Pilskog, who is also Chair of Release.
“The innovative approach of Release follows a dynamic rolling delivery model of build, connect, and deliver. Looking ahead, Release is actively exploring additional opportunities in Cameroon, Liberia, and the rest of West- and Central-Africa, reinforcing its commitment to advancing renewable energy solutions across the African continent and other select markets,” says Release CEO Hans Olav Kvalvaag.
This significant step comes after Release recently raised USD 102 million in funding from Climate Investor One, a fund managed by Climate Fund Managers, a leading climate-centric blended finance fund manager backed by FMO, the Dutch Development Bank, and Sanlam Infraworks, part of the Sanlam Group of South Africa.
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