Norway-based PV developer Scatec Solar has announced the acquisition of SN Power. Scatec has also decided to drop the word “Solar” from its name after agreeing to acquire SN Power for $1.1 billion from NorFund, a private equity firm owned by the Norwegian government. The deal is expected to close in Q2 2021.
Through this transaction, Scatec Solar is diversifying its activities in Africa, where it currently produces only solar energy. Scatec has 3.3 GW of operational capacity and a target to reach 4.5 GW by the end of 2021. SN Power’s 2.5 GW portfolio includes hydro, wind, storage and floating solar, which the company has been testing on the reservoirs of some of its hydro assets. A 40 MW battery project in the Philippines is also described as being at a “mature” stage of development. The battery will provide ancillary services to the grid as well as offering backup power for the hydro itself.
The SN Power acquisition means the combined companies will have a pipeline of 9.5 GW of renewable projects. That compares favorably with its peers, such as Mainstream Renewable Power, which has a pipeline of 9.8 GW.
Scatec CEO Raymond Carlsen said the focus is now on growth. “You might think the energy transition is going quickly, but it is going to be even quicker,” he said during an investor conference on Friday.
Scatec has “several hundred megawatts” of wind projects in development in Africa and Southeast Asia, according to the company’s CEO Raymond Carlsen. The Oslo-listed firm made its name as an early mover developing utility-scale solar plants in South Africa. Since then it has added projects in other emerging markets including Egypt, Malaysia and Ukraine. It claims to be the largest solar operator in Africa with around 1 GW of PV capacity.
The three countries where SN Power is active — the Philippines, Laos and Uganda — are all new territories for Scatec. Carlsen stated that Scatec will now shift its focus from only working in emerging markets to working in any market offering growth potential, including some OECD countries.
Meanwhile, Scatec and Norfund have also agreed to launch a joint venture to operate hydropower projects in sub-Saharan Africa. Under this joint venture, Norfund will have a 49 per cent stake and Scatec Solar will have a 51 per cent stake as operator.
REGlobal’s Views: Scatec and SN Power are a strong cultural fit. Rooted in Norway’s industrial tradition, both companies are ambitious front-runners in green energy in emerging markets. The deal provides technological and geographical diversification for Scatec to further enhance cash flow resilience and increase optionality with respect to profitable growth. With SN Power, Scatec will strengthen its position as a partner for governments and communities working towards greater share of renewables.
