Investment from Climate Fund Managers in Release Solar

CLP advised Climate Fund Managers (CFM), in the investment of USD 102 million in Norwegian renewable energy company Release Solar AS (Release), a wholly owned subsidiary of Scatec ASA. The investment will be used to roll out Release’s innovative solar PV and battery solutions to power utilities and mining companies across Africa, reducing energy costs, strengthening energy security, and helping decarbonize generation by replacing traditional diesel and heavy fuel oil or coal fired generation solutions.

CLP’s deal team consisted of Amund Erdal and Axel Manø Juul.

CFM is a leading climate-centric blended finance fund manager backed by FMO, the Dutch Development Bank, and Sanlam Infraworks, part of the Sanlam Group of South Africa. The company invested in Release via its Climate Investor One (CIO) fund; a blended finance vehicle focused on renewable energy infrastructure in emerging markets. CFM will contribute USD 55 million in equity for a 32% stake in Release. Scatec, a renewable energy frontrunner in emerging markets, will retain the majority shareholding of 68%. CFM will also provide shareholder loans totalling USD 47 million, part of which will be on concessional terms.

At the core of Release is its flexible leasing model – a model designed to offer a viable clean energy alternative in even the most challenging-to-electrify places in Africa. The solution has been designed for mining and utilities companies with lower power needs of 1-30MW. At this end of the spectrum, companies have to rely on diesel-powered generators with negative climate impact. Release’s innovative technology enables clean energy to be delivered in six to nine months from initial discussions – rather than the three to five years of a traditional IPP. As it is modular, customers can gradually increase their power needs from 5 MWp up to 30 or 50 MWp as required. Currently, Release has projects in operation and under construction in Cameroon, South-Africa, Mexico, and South-Sudan with a total capacity of 47 MW solar PV and 20 MWh of battery storage, and has signed additional contracts for 35 MW solar PV and 20 MWh of storage in Chad.

Andrew Johnstone, CEO of CFM said: “CFM’s purpose is to help end the climate crisis. We do this by raising and deploying cutting-edge blended finance funds at scale and at pace. Our blended finance model facilitated the integration of impact finance into the deal structure, which Release will be able to leverage to improve its cost structure for its battery and grid connection solutions, allowing Release to offer even more competitive pricing and better value to its clients. We are delighted to support the Release team as they roll-out their critical climate technology across Africa, helping significantly reduce the emissions of the mining and utility sectors.”

Hans Olav Kvalvaag, CEO of Release, said: “One of the greatest barriers to adopting solar technology is its capital-intensive nature. Release helps our customers overcome this by providing a flexible and affordable model. Our solar PV and battery solution is extremely competitively priced when compared to diesel generators or other traditional grid-stabilization measures. We look forward to working with CFM as we increase our capacity and scale our cost-effective solar PV solution across Africa.”

“We are very excited to have Climate Fund Managers join us as a partner to accelerate the significant growth potential of the Release platform. Release is offering a unique renewable energy solution in a rapidly growing market segment that requires a different business model than Scatec’s larger scale project business. Today’s transaction establishes Release as a strong and independent company while Scatec remains the main shareholder and offers services to support Release and drive synergies in the next phase of the company’s development.” says Scatec CEO Terje Pilskog, who is also the Chair of Release.

More information is available here.

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