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An historic agreement to Build-Own-and Operate West Africa's first utility-scale solar power plant was signed by Norwegian company Scatec Solar and its partners, the Malian Ministry of Energy and Water and Electricité du Mali (EDM), the electricity utility of Mali. To be located near the ancient city of Segou in South-East Mali, 240 kms from Bamako, the 33 MW solar project is being developed in partnership with IFC InfraVentures and the local developer Africa Power 1.
Speaking on the occasion, the Malian Minister of Energy and Water, Mr. Mamadou Frankaly Keita said: "This landmark agreement signals the Government's commitment to meet the nation's growing energy demand and to provide clean, renewable and affordable energy to our people".
The agreements include a Power Purchase Agreement (PPA) between EDM and Segou Solaire SA, the local project company controlled by Scatec Solar, for the delivery of solar power over the next 25 years. The PPA with the utility is complemented by a Concession Contract with the Government of Mali, granting license to Segou Solaire to operate.
With this PPA, Scatec Solar strengthens its position as the integrated solar IPP (Independent Power Producer) in Africa. The Oslo-headquartered company's CEO Raymond Carlsen says: "This project is another great milestone for Scatec Solar. After several years of development efforts in the region, we can now move forward with the first utility-scale solar plant in West Africa. The Malian Authorities have demonstrated decisive will to tackle the nagging issue of power supply."
Scatec Solar ASA (SSO) will own 50 percent of the power plant and World Bank's IFC InfraVentures, will hold 32.5 percent, while the local project development company, Africa Power 1, headed by Mr. Ibrahim Togola, will hold 17.5 percent. Scatec Solar will construct the plant, and in addition, provide operation and maintenance services after the plant is connected to the grid.
Annual production from the 33 MW solar power plant is estimated to be 60,000 Megawatts hour (MWh). The ground-mounted photovoltaic (PV) solar plant will deploy approximately 130,000 PV modules on a fixed tilt system and will connect to an existing transmission line. This will provide clean and affordable energy to a country in dire need for more power generation capacity to support further economic growth. The power generated from the plant represents five percent of Mali's total electricity consumption, equal to the electricity consumption of 60,000 households. During the construction phase, the project will provide 200 local jobs. As part of Scatec's corporate philosophy, special emphasis will be put on transferring technical expertise to the local community.
In an era of climate change concerns, the 33 MW Segou solar power plant is an important initiative to reduce carbon emissions in the power sector in West Africa. When completed, the plant will reduce CO2 emissions by about 46 000 tons. Scatec Solar and EDM will jointly register the project with the United Nations CDM (Clean Development Mechanism) under Scatec Solar's program for solar projects in Africa. This allows generation of revenues from the sale of international carbon credits.
The project with a total cost of Euro 52 million is to be financed through 45% senior project finance debt. IFC will arrange the Debt for a total amount of Euro 23 million (of which it will itself fund Euro 13 million).Further, the project has already been granted a concessional loan that will cover 30% of the total project costs from Climate Investment Fund through the program "Scaling Up Renewable energy in Low Income Countries Program" (SREP). The remaining 25% is provided as equity by the project partners. Financial close is expected before the end of this year.