Scatec ASA has started construction of a 142 MW solar plant in Minas Gerais, Brazil, a project bringing the company’s installed capacity in the country to 835 MW. To support its equity investment, Scatec has secured a €25 million loan from the Danish Investment Fund for Developing Countries (IFU), with its total expected equity injection reaching $28 million.
Strategic Growth in Brazil’s Renewable Energy Sector
The new solar plant marks Scatec’s first project in Brazil’s southeast submarket, a region with high electricity demand, making it a key location for expansion. Scatec’s CEO, Terje Pilskog, emphasized the importance of this development, stating that the company remains committed to growing its presence in Brazil and advancing the green energy transition.
Scatec has signed a power purchase agreement (PPA) with Statkraft covering approximately 75% of the power generated by the solar plant. The remaining electricity will be sold through a mix of short, medium, and long-term contracts—a strategy designed to ensure financial stability while maximizing revenue generation.
Financial Structure and Investment Details
The total cost of the solar plant is estimated at $85 million, with funding from multiple sources. Long-term, non-recourse project debt will cover 35% of the investment, while Scatec’s equity and the short-term facility from IFU will finance the remainder. Financial close for the long-term project debt is expected in the first half of 2025.
Scatec will initially hold full ownership of the solar plant but plans to bring in equity partners after commercial operations begin. This approach aims to enhance value creation and optimize investment returns.
Scatec will serve as the Engineering, Procurement and Construction (EPC) manager for the project, although its EPC role will be limited. The company will also provide Operations & Maintenance and Asset Management services once the plant is operational.
This project aligns with Scatec’s long-term strategy of expanding its renewable energy portfolio, which currently stands at 5 GW of capacity in operation and under construction across four continents. Developing new solar projects like this one reinforces Scatec’s position as a leader in the renewable energy sector.
The Growing Importance of Solar Energy in Brazil
Brazil has emerged as a key market for solar energy investments, with its growing electricity demand and supportive regulatory environment making it attractive for renewable energy developers. The southeast submarket, where Scatec’s new solar plant is located, is particularly important due to its large consumer base and strong need for reliable power sources.
Brazil’s commitment to clean energy has driven the expansion of solar power projects, supported by government policies that encourage renewable energy adoption. These policies include incentives for private sector investments and competitive auctions for energy contracts.
Scatec’s 142 MW solar plant in Minas Gerais represents a major step forward in Brazil’s clean energy transition. With strong financial backing and strategic planning, the project is set to contribute significantly to the country’s renewable energy capacity.
As Scatec continues to expand its presence in Brazil, it supports the broader goal of reducing carbon emissions. The Urucuia solar plant is a clear example of how renewable energy investments can drive economic and environmental benefits. With operations set to begin in 2026, the project is poised to play a vital role in strengthening Brazil’s solar energy landscape.
