Scatec ASA has started construction of a 142 MW solar plant in Minas Gerais, Brazil. This project will increase Scatec’s installed capacity in the country to 835 MW. The company has secured a €25 million loan from the Danish Investment Fund for Developing Countries (IFU) to support its equity investment. Scatec’s total expected equity injection stands at $28 million.
Strategic Growth in Brazil’s Renewable Energy Sector
The new solar plant marks Scatec’s first project in the southeast submarket of Brazil. This region has a high electricity demand, making it a key location for expansion. Scatec’s CEO, Terje Pilskog, emphasized the importance of this development. He stated 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. This agreement covers approximately 75% of the power generated by the solar plant. The remaining electricity will be sold through short, medium and long-term contracts. This strategy ensures financial stability and maximizes revenue generation.
Terje Pilskog, Scatec CEO, said: “We are very excited to start construction of our third solar project in Brazil which will take our total capacity in the country to 835 MW. This is our first plant in the southeast submarket where power demand is strong, diversifying and
Financial Structure and Investment Details
The total cost of the solar plant is estimated at $85 million. Funding will come from multiple sources. Long-term, non-recourse project debt will cover 35% of the investment. 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. However, the company plans to bring in equity partners after commercial operations begin. This approach will enhance value creation and optimize investment returns.
Scatec will serve as the Engineering, Procurement and Construction (EPC) manager for the project. However, the company’s EPC role will be limited. Scatec will also provide Operations & Maintenance and Asset Management services once the plant becomes operational.
This project aligns with Scatec’s long-term strategy of expanding its renewable energy portfolio. The company currently has 5 GW of capacity in operation and under construction across four continents. By developing new solar projects, Scatec is reinforcing its 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. The country’s growing electricity demand and supportive regulatory environment make it attractive for renewable energy developers. The southeast submarket, where Scatec’s new solar plant is located, is particularly important. It has a large consumer base and a strong need for reliable power sources.
Brazil’s commitment to clean energy has driven the expansion of solar power projects. The government has implemented policies to encourage renewable energy adoption. This includes 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, its efforts will support 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 will play a vital role in strengthening Brazil’s solar energy landscape.