Norwegian renewable power producer Scatec ASA (SCATC) has entered into an agreement with the Government of Lesotho and the Lesotho Electricity Company (LEC) to build a 20MW solar project in Lesotho.
The solar project named Neo 1 will be the first public-private, utility-scale solar plant in the Kingdom of Lesotho. The project has a total estimated capital investment of ZAR 430 million (USD 26.5 million) funded by Renewable Energy Performance Platform and equity co-sponsors including Scatec, Norfund, One Power Lesotho, Lesotho Pension Fund, and Izuba Energy.
Scatec will be the lead equity investor in the project and carry out the EPC services as well as provide operation & maintenance and asset management services to the power plant. The electricity produced will be sold to the LEC through a 25-year Power Purchase Agreement (PPA), with a financial close expected in early 2022. The connection and implementation agreements with the LEC and the Government were signed at an official ceremony held in Lesotho’s capital, Maseru.
Scatec sub-Saharan GM, Jan Fourie mentioned the project as an important step for Scatec for being the first independent power producer to develop a solar project in Lesotho.
“The Southern African region is a key market for Scatec and a region with great potential for the development of affordable clean energy. Scatec is the leading solar IPP in the region, and we look forward to expanding our footprint and developing more renewable energy in the years to come,” he said.
There are no such utility-scale projects operating in Lesotho, despite having a rich endowment of renewable energy resources. The land-locked country in Southern Africa has one of the world’s lowest electrification rates with only 10% of people having access to electricity in rural areas and nearly 50% in urban areas.
The Government of Lesotho has set a goal of increasing the electrification rate to 75% of households by the next year. Lesotho has identified hydropower, wind, and solar power as potential renewable energy sources to help reach these targets. The 20 MW solar plant will increase Lesotho’s installed power generation capacity and improve the country’s energy independence, providing affordable, reliable, and sustainable energy to the people.