South Africa’s Kenhardt 540-MW solar project faces delay says developer

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South Africa's Kenhardt 540-MW solar project faces delay says developer

Norwegian green power producer Scatec says it has been notified by the IPP Office in South Africa of the delay in approval process for the RMIPP programme thus affecting the construction of its Kenhardt 540-MW solar-plus-storage project.

Construction start for Scatec’s 540 MW + storage project is therefore expected in the first quarter 2022.

Scatec acknowledges that the renewable industry is currently affected by cost inflation and supply chain disruptions, which to a varying degree affects Scatec’s project backlog and pipeline.

Scatec has decided not to move forward with backlog projects totaling 166 MW in Brazil and Ukraine, as projected margins and returns fall below the Company’s hurdle rates. The company expects total impairment of NOK 40-50 million of development cost related to the two projects, which will be charged to the Income Statement for the third quarter 2021.

On this basis, Scatec will not reach the target of 5.9 GW in operation or under construction by the end of 2021, and the project backlog has been lowered from 2,081 MW to 1,915 MW.

The target to reach 15 GW in operation or under construction by the end of 2025 remains in place.

“It is disappointing not to reach the 2021 growth target, but with our track record and solid pipeline we will continue to deliver growth and long-term value. South Africa is our home market, and we are looking forward to delivering much needed electricity under the RMIPP programme”, says CEO Raymond Carlsen.

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