Norway’s Scatec to build giant Africa solar plant

Norwegian renewable energy specialist Scatec Solar has struck a €52m deal to build West Africa's first industrial-scale solar power plant, the company announced in a statement on Friday.

Norway's Scatec to build giant Africa solar plant
Scatec's Dreunberg plant in South Africa. Photo: Scatec
The Oslo-based company said it planned to build the plant in the  city of Segou in the south west of Mali and run it for 25 years.
“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,” energy minister Mamadou Frankaly Keita was quoted as saying.
The plant is expected to produce enough electricity each year to power 60,000 typical family homes, while cutting annual carbon dioxide emissions by about 46,000 tonnes.
Mali, a volatile, conflict-hit country of over 16 million people, has been plagued in recent years by chronic electricity outages.
The government reported last year that the country, which is almost two-thirds desert, had managed to supply just 45 percent of its electricity demand in 2013.
The administration in Bamako says Mali's EDM-SA energy company — two-thirds owned by the state and a third owned by a subsidiary of the Aga Khan group — is in crisis, failing to ensure an adequate supply despite state
subsidies worth 87.7 million euros in 2013.
“After several years of development efforts in the region, we can now move forward with the first utility-scale solar plant in west Africa,” Scatec Solar CEO Raymond Carlsen said.
“The Malian authorities have demonstrated decisive will to tackle the nagging issue of power supply.”
Scatec will own 50 percent of the Segou plant while the World Bank's International Finance Corporation will hold 32.5 percent, leaving the remaining equity to local partner Africa Power 1.
The project is to be funded by a combination of traditional bank borrowing, a loan from the World Bank's Investment Climate Fund and equity contributed by the partners.

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Investor darling REC laying off 700

The pride of Norway's industrial green energy effort, Renewable Energy Corp., has decided to shut down three Norwegian factories, or nearly half its local production, as a world glut in solar cell production forces the company's hand.

Investor darling REC laying off 700
Photo: REC

About 700 people will be laid off, a message to shareholders on Tuesday said. Third-quarter revenues of 3 billion kroner ($543 million) were not enough to stave off closures, and management used the occasion of its quarterly earnings release to deliver the bad news.

The company had been curbing Norwegian production of solar cells in line with a world surplus, but faced an uphill battle against labour costs and the shortage of lending to its European customers.

With just its newest Norway plant surviving the cuts, investors turned on the company and its stock fell nearly six percent in morning trading to 5.96 kroner.

REC’s 775-megawatt-a-year solar wafer plants at Herøya and Glomfjord and its solar cell plant at Narvik (180 MW) will be shut down. Contract earnings are expected to cancel out the cost of shutting down the plants.

Though partly expected, the news of a complete shutdown for three plants comes as a shock after the company had trimmed a 6.2-billion-kroner loss from this time last year down to 445 million kroner.

The layoffs mean REC production in Norway is cut in half, although in an online presentation, company president and chief executive Ole Enger warned it might not be the end of Norway cuts.

“It’s regrettable, but a necessary measure in today’s market situation,” Enger said, adding, “We’re working now to regain our competitive power at the remaining Norwegian plants.

Once one of the largest solar players, REC’s enterprise value had fallen to fifth place behind Wacker, First Solar, GCL Poly and MEMC. Much of that value was debt, and those four rivals are now nearly debt free in a lending-tight world.

The cuts followed earlier layoffs in Glava, Sweden, although the company’s prized Asian plants are not expected to declare redundancies.

The Norwegian cuts mean a loss of 45 percent of REC’s wafer capacity.