The Norwegian company Scatec Solar and its partners have signed with the Malian ministry for Energy and Water and the National Electricity Company of Mali (EDM), an agreement for the construction, financing and operation of a 33MW solar plant.

Located near the historical city of Segou in the South-East of Mali, 240 km from Bamako, this project has been developed in partnership with IFC InfraVentures and the local developer Africa Power 1.

The signed agreements include a long term purchase contract (CAE) between EDM and Segou Solaire, the local company set up for the project and monitored by Scatec Solar, to supply solar energy for 25 years. The CAE with EDM is consolidated by a concession agreement with the government of Mali, giving Segou Solaire a licence to operate.

Scatec Solar ASA (SSO) will hold 50% of shares in the plant and operator, while IFC InfraVentures of the World Bank Group and Africa Power 1, owned by local developer Dr Ibrahim Togola, will respectively hold 32.5% and 17.5%

During the construction phase, the project will create 200 local jobs. Once construction is completed, the Segou solar plant subscribing to the MDP (Mecanism for a Clean Development) will allow a reduction of CO2 emissions by around 46,000 metric tons/year.

The project for a total cost of €52 million will be financed through 45% senior project finance debt. IFC InfraVentures will arrange the debt for a total amount €23 million (of which it will itself fund €13 million). Moreover, the project has been granted a concessional loan that will cover 30% of the total project cost from “Climate Investment Fund”, through the “Scaling Up Renewable Energy in Low Income Countries Program” (SREP). The remaining 25% will be provided as equity by the project partners. The financial close is expected by the end of the year.