Scatec Solar inks deal to build 200MW PV in Malaysia

It will cover 3 solar projects costing clost to US$300m.

Scatec Solar has entered the Malaysian large-scale solar energy market by joining forces with a local ItraMAS-led consortium that has signed three 21-year Power Purchase Agreements (PPAs) with the country's largest electricity utility, Tenaga Nasional Berhad (TNB).

The partnership covers three solar projects totaling nearly 200 MW and involves a total investment of close to US$300m. Located in Merchang in the north, Jasin in the south and Gurun in the west of Peninsular Malaysia, the three photovoltaic solar parks cover more than 200 acres each.

Scatec Solar expects to invest about US$60m through preference shares partly convertible to a 49% equity ownership in the projects. The investment expects to provide long term stable cash flows and to meet Scatec Solar's investment hurdle rates. The agreement with the Malaysian consortium includes Scatec Solar acting in its well-known integrated role, including undertaking the turnkey EPC for the projects.

"This is a landmark opportunity to bring our wide-ranging expertise to realize the largest solar energy portfolio in South East Asia. For Scatec Solar and our partners, this is a stepping stone to enter one of the most dynamic and fast growing regions of the world'' said Raymond Carlsen, CEO of Scatec Solar.

Headquartered in Kuala Lumpur, ItraMAS, a Malaysian LED lighting and traffic management and construction engineering company, is the lead sponsor of the three solar projects and signed the PPA on behalf of the local consortium that includes two other Malaysian companies, Maltech and Cam Lite.

CIMB, Malaysia's second largest commercial bank, has been appointed to arrange the non-recourse project debt financing for the three projects. All development, financing and project implementation preparatory activities are currently underway to reach timely financial close with the construction expected to begin immediately thereafter.