Norwegian PV developer Scatec Solar has acquired hydro developer SN Power and detailed its plans for expansion in new geographies and new technologies.
Scatec is also dropping the ‘Solar’ from its name after agreeing to acquire SN Power for $1.1 billion from NorFund, a private equity firm owned by the Norwegian government. The deal is expected to close in Q2 2021.
Scatec has 3.3 gigawatts of operational capacity and a target to reach 4.5 GW by the end of 2021. The SN Power acquisition means the combined companies will have a pipeline of 9.5 GW of renewable projects. That compares favorably with its peers, such as Mainstream Renewable Power, which has a pipeline of 9.8 GW.
Scatec CEO Raymond Carlsen said the focus was now on growth. “You might think the energy transition is going quickly but it is going to be even quicker,” he said during an investor conference on Friday.
From emerging to growth markets
Scatec has “several hundred megawatts” of wind projects in development in Africa and Southeast Asia, according to Carlsen. Scatec will develop greenfield sites while also looking to make project acquisitions.
Scatec has been something of a quiet achiever in the solar market. The Oslo-listed firm made its name as an early mover developing utility-scale solar plants in South Africa. Since then it has added projects in other emerging markets including Egypt, Malaysia and Ukraine. It claims to be the largest solar operator in Africa with around 1 GW of PV capacity.
The three countries where SN Power is active — the Philippines, Laos and Uganda — are all new territories for Scatec.
Carlsen said Scatec will now shift its focus from only working in emerging markets to working in any market offering growth potential, including some OECD countries.
The operational assets of SN Power will make an outsize contribution to Scatec’s cash flow, which Scatec CFO Mikkel Tørud said will allow the company it to accelerate investments in new projects.
SN Power had an EBITDA margin of 65 percent in 2019.
Fitting technologies together
SN Power’s 2.5 GW portfolio includes hydro, wind, storage and floating solar, which the company has been testing on the reservoirs of some of its hydro assets. Carlsen said part of the appeal of the acquisition was the complementary cultures of the two Norwegian firms, but the technologies offered by each were also a good fit.
A 40 MW-battery project in the Philippines is also described as being at a “mature” stage of development. The battery will provide ancillary services to the grid as well as offering backup power for the hydro itself.
“I’m getting very motivated when I see things like solar power on a hydro reservoir,” Carlsen said. “What a beautiful relationship that is, especially in parts of the world where water supplies are scarce. The solar can provide power during the day and the hydro during the night.”
“We will see more relationships like that. These technologies fit together.”
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