Norwegian renewable energy provider Scatec ASA has reached financial close for the R3 billion 103 MW Mogobe battery energy storage system (BESS) to be built in the Northern Cape.

The project was awarded a 15-year power purchase agreement (PPA) under the first window of the Battery Energy Storage Independent Power Producer Procurement Programme.

As part of the PPA, Scatec will receive payments for making the storage capacity available to the National Transmission Company of South Africa to balance the grid.

With Standard Bank as the lead arranger, 83% of the R3 billion capex for the BESS project will be allocated to Scatec’s engineering, procurement and construction contracts. The project will be financed with R2,7 billion of non-recourse project debt. Scatec will provide operations, maintenance and asset management services.

The company will own 51% of the equity in the project, Perpetua Mogobe 46,5% and a holding company of the Mogobe Local Community Trust 2,5%.

“With this project, we are showing that dispatchable energy and grid infrastructure are cornerstones of the sustainability of South Africa’s current and future energy system. By unlocking more grid capacity, we are enabling further electricity access and more renewable energy grid connections in years to come,” said Roar Haugland, Scatec Executive Vice President: Sub-Saharan Africa.