PPA signed for 142 MW solar project in Minas Gerais

Scatec ASA, signed a 10-year power purchase agreement (PPA) with Statkraft Energia do Brasil Ltda in Brazil, for a 142 megawatt (MW) solar plant in Minas Gerais, in Brazil.

The BRL-denominated PPA covers about 75% of the expected power produced, while the remainder is expected to be sold under short, medium, and long-term term contracts (PPAs). The project’s estimated equity return exceeds Scatec’s hurdle rate of 1.2x the project’s cost of equity.

The estimated total capital expenditure (capex) for the solar plant is US$94 million, to be financed by non-recourse financing covering approximately 63% of this amount with the balance funded by equity from Scatec. Furthermore, Scatec is in mature discussions with lenders in respect of a debt facility of approximately EUR 15 million (US$16.05 million) to partially fund Scatec’s equity share in the project. Financial close and construction start for the solar plant is expected in the second half of this year, with commercial operations expected to start at the end of 2025.