The 33 MW solar power plant will be located near the ancient city of Segou in South-East Mali, 240 kilometres from Bamako, the country’s capital city and will be developed in partnership with IFC InfraVentures and local developer Africa Power 1. The agreement includes 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.
“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” said Malian Minister of Energy and Water, Mr. Mamadou Frankaly Keita.
Raymond Carlsen, Scatec Solar CEO, added that the Malian Authorities have demonstrated a decisive will to tackle the nagging issue of power supply in the country.
The PPA will enable Scatec Solar to strengthen its position as a major integrated solar Independent Power Producer (IPP) in Africa. Scatec Solar ASA 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 provide operation and maintenance services after the plant is connected to the grid.
Increasing access to energy in Mali is part of the World Bank's Country Assistance Strategy for the country. The new plant will enable Mali to become the first country to install the largest solar grid-connected power plant in the region. The plant will serve as a model to launch the solar era in West Africa, producing an estimated 60,000 MWh and deploying approximately 130,000 PV modules on a fixed tilt system, connecting to an existing transmission line. The panels will generate five percent of Mali's total electricity consumption, equal to the electricity consumption of 60,000 households while providing 200 local jobs. It will also displace 46,000 tons of carbon dioxide emissions. Scatec Solar will place special emphasis on transferring technical expertise to the local community.
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 will be financed through 45 percent senior project finance debt totalling 23 million euros of which IFC will fund 13 million. The total cost of the project will be 52 million euros. A concessional loan has been granted that will cover 30 percent of the total costs from the Climate Investment Fund through the “Scaling Up Renewable energy in Low Income Countries Programme (SREP)”. The remaining 25 percent will be provided as equity by the project partners. Financial close is expected before the end of the year.