UK-based power company Globeleq has purchased Norwegian renewable power firm Scatec’s 52.5% share in the 41MW Central Solar de Mocuba solar PV plant in Mozambique, becoming the project’s largest shareholder and manager.
Globeleq purchased Scatec’s share for US$8.5 million and also closed a deal to acquire an additional 22.5% share in the project, which was originally owned by KLP Norfund Investments, an investment company funded by the Norfund Investment Fund and KLP, Norway’s largest pension fund. Scatec noted that it expects the deal to generate a “net accounting gain” for the company of between US$3-4 million.
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The power company’s ownership is split between British International Investment, which owns 70%, and the Norfund Investment Fund, which owns the remaining 30%, and the deals struck will leave Globeleq the majority shareholder of the project, with a 75% share. The remaining 25% is owned by Electricidade de Moçambique (EDM), the country’s state-owned power company.
“This transaction is in line with our strategy to optimise our portfolio, which includes the divestment of smaller assets in non-focus markets,” said Scatec CEO Terje Pilskog. “The sale will release capacity for our focus markets and capital for new investments in renewable energy. We are very pleased to secure a value accretive transaction and are confident that Globeleq will be a solid owner of the asset going forward.”
The project itself was built between March 2018 and August 2019, 13km from the city of Mocuba in Zambezia province in central Mozambique. EDM has been involved in the project since commercial operations began, signing a 25-year power purchase agreement to acquire power from the farm, and distribute it to the Mozambique grid, and neither Scatec nor Globeleq announced any changes to this arrangement.
The Mocuba project will be particularly significant as Mozambique looks to develop its renewable power sector. According to the International Energy Agency, the country’s reliance on solar power was negligible in 2020, with solar and wind accounting for just 253TJ of power, less than coal, hydropower, oil, natural gas and the recycling of biofuel, which dominates the Mozambique energy mix.
Projects like this could also help Mozambique achieve the parallel goals of ensuring access to energy for its citizens and keeping up with growing demand for power from its export sector. The percentage of the population of Mozambique with access to electricity increased from 20.2% to 31.5% between 2011 and 2021, according to the World Bank, and growing this figure will be a priority for the government.
However, the export of electricity is a key component of Mozambique’s economy, and new power generation facilities will be vital to meet this financial demand. According to the Observatory of Economic Complexity, in 2021, Mozambique exported US$381 million of electricity, making it the 38th largest exporter of electricity in the world, despite the country having the 9th-lowest GDP per capita in 2022, according to the World Bank.
Investment in domestic clean power generation will be vital to both ensuring access to electricity and improving the country’s economic position as a whole. The news follows Ncondezi Energy’s plans to build a 300MW solar-plus-storage project in the country, as companies across Africa look to invest in solar projects in Mozambique.
“I am very pleased that Globeleq is continuing to build its presence in Mozambique through the purchase of the Mocuba solar plant,” said Globeleq CEO Mike Scholey. “This acquisition, alongside our other projects, demonstrates our commitment both to Mozambique and to building our renewable power portfolio in Africa.”