Norwegian renewables developer Scatec will miss its 5900MW goal for projects in operation or under construction by the end of 2021, having been delayed on a 540MW solar plus storage project in South Africa among other things. Scatec said it had been notified by the IPP Office in South Africa that the government approval process for the RMIPP programme has been delayed and that timing of financial close has been moved to the end of January 2022. Construction start of the 540MW project is therefore expected in the first quarter 2022, the company said. It added that the renewables industry is currently affected by cost inflation and supply chain disruptions, which to a varying degree affects Scatec’s project backlog and pipeline.
Scatec said it has decided not to move forward with backlog projects totalling 166MW in Brazil and Ukraine, as projected margins and returns fall below the company’s hurdle rates. The company expects total impairment of Nkr40m-50m (€4m-€5m) of development cost related to the two projects, which will be charged to the income statement for the third quarter 2021. Therefore, Scatec said it will not reach the target of 5.9GW in operation or under construction by the end of 2021, and the project backlog has been lowered from 2081MW to 1915MW. The target to reach 15 GW in operation or under construction by the end of 2025 remains in place, it added. Scatec chief executive Raymond Carlsen said: “It is disappointing not to reach the 2021 growth target, but with our track record and solid pipeline we will continue to deliver growth and long-term value.”