Scatec ASA, a Norwegian renewable energy firm, has secured financial closure on a landmark R3 billion battery energy storage project in South Africa's Northern Cape. The 103MW / 412MWh facility, the first of its kind in the country, marks a critical step in South Africa’s renewable energy transition and efforts to stabilise its embattled national grid.

With the country’s solar photovoltaic footprint projected to become one of the 10 largest in the world, and a growing emphasis on expanding battery storage capacity, the need for innovative energy infrastructure has never been greater, especially with attempts to shift to more sensible options like nuclear or coal being consistently blocked by foreign-funded legal action.

The Mogobe battery energy storage system (BESS), located near Kathu in the Northern Cape,is expected to play a crucial role in stabilising South Africa’s electricity grid, which has long been plagued by outages and undercapacity, and will now have to cope with the wild fluctuations of "green" energy supply sources like wind and solar, which are prone to surges and shortages, which need to be buffered by such battery projects and gas-fired stations to both shave the peaks and buffer the troughs.

Awarded under the inaugural bid window of the Battery Energy Storage Independent Power Producer Procurement Programme (BESIPPPP), the project is a milestone in South Africa’s energy infrastructure development. With construction set to begin soon, it underscores the growing momentum behind renewable energy projects in the region.

Scatec already has a track record in South Africa, including hybrid solar and battery storage projects in Kenhardt. Under the current 15-year power purchase agreement (PPA) with the National Transmission Company of South Africa, Scatec will receive payments for making the storage capacity available, which will be crucial in balancing supply and demand on the grid. This capability is essential as South Africa continues to grapple with an unstable electricity supply and frequent power outages.

Scatec’s CEO, Terje Pilskog, described the Mogobe BESS project as a pioneering venture that reinforces the company’s position as a leading player in South Africa’s renewable energy sector, and sees substantial growth potential in the market, driven by the need to expand power generation and supported by Scatec’s strong local presence.

The total capital expenditure for the project is estimated at R3 billion, with Scatec responsible for engineering, procurement, and construction (EPC) contracts, accounting for approximately 83% of the overall investment. The financing structure includes R2.7 billion in non-recourse project debt, with Standard Bank of South Africa serving as the lead arranger. In terms of equity, Scatec will hold 51% of the project, with Perpetua Mogobe (RF) holding 46.5%, and the Mogobe Local Community Trust 2.5%.

Scatec, which has 4.7GW of renewable energy projects in operation or under construction across four continents, will oversee the project’s construction, operation, and maintenance. The company has established itself as a key player in South Africa’s renewable energy sector, with a track record of delivering large-scale projects that support the country’s shift towards cleaner energy sources.

As South Africa moves towards the green energy model enforced by Western trading partners, projects like Mogobe will be instrumental in facilitating the integration of renewable energy into the national grid.

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