European solar power producer Scatec Solar has agreed to acquire SN Power from Norfund in a deal valued $1.166bn.
Under the deal, Scatec will take over SN Power’s portfolio. This portfolio includes hydropower assets in the Philippines, Laos and Uganda, and has total gross capacity of 1.4GW.
Currently, SN Power has a project pipeline of nearly 2.5GW capacity in Asia and Sub-Saharan Africa.
A spokesperson for Scatec Solar said this deal formed part of its growth strategy. It aims to become a global large-scale player in solar, hydro, wind and storage solutions.
Scatec Solar CEO Raymond Carlsen said: “Hydropower and solar PV are complementary technologies, resulting in new project opportunities, for instance floating solar on hydro reservoirs.
“With this transaction, we see great potential in broader project origination and geographical expansion into growth markets in South East Asia and Sub-Sahara Africa.”
Scatec will fund the acquisition with a combination of cash available, a $200m vendor note, a $150m term loan and a $700m acquisition financing from Nordea, DNB, BNP Paribas and Swedbank.
Norfund, a Norwegian Investment Fund, has been a long-term partner of Scatec Solar.
As part of the deal, the two parties have also agreed to establish a new joint venture. This will manage SN Power’s Sub-Saharan Africa hydro assets, and develop the hydropower pipeline in the region.
In the new venture, Scatec Solar will operate assets and hold a 51% stake, while the remaining 49% stake will be held by Norfund.
Norfund CEO Tellef Thorleifsson said: “Norfund’s investment in SN Power has contributed to job creation, improved living conditions and avoided carbon emissions.
“By mobilising private capital in SN Power, we can recycle significant funds for new investments, demonstrating the effectiveness of using development aid to invest in clean energy in developing countries.”
Completion of the deal is subject to customary regulatory approvals and local competition approvals. It is expected to take place in the first half of next year.
Upon completion of the deal, the combined company will have a workforce of 450 employees, with power plants spread across 14 countries. It will also have a gross capacity of 3.3GW in operation and under construction.
In February 2014, Scatec Solar and Norfund started construction on an 8.5MW solar photovoltaic solar park in Rwanda.