Why Scatec Solar succeeds out in the world

This content was published before 1 July 2021 by GIEK or Eksportkreditt Norge.

“There are three things in particular we think have been important to our success in the world,” says Mikkel Tørud, the company’s CFO.

First, we have chosen a specialised business model where we concentrate on being good at one thing, namely building, owning and operating large-scale solar power plants.

Mikkel Tørud, CFO, Scatec Solar

One challenge the company has risen to is managing many projects in many countries at once. Working with governments in a variety of countries, from Rwanda to the Czech Republic and Honduras, can be demanding, but with a specialised business model it is possible to work on multiple projects in different counties.

“The second cause I would highlight is that, while we have hired people from many disciplines, many of them have broad, crossover expertise and can communicate well at the political level as well as ‘on the ground’. This is especially important when you are cooperating with developing countries that are ambitious about investing in renewable energy but don’t quite know how to proceed,” Tørud says.

Scatec Solar has employed specialists in fields from from engineering to law. Tørud believes this makes the company less dependent on external resources and more likely to succeed due to greater accuracy in prioritising projects. “When we assess new business opportunities, having this expertise in-house is a great advantage,” Tørud says. “We avoid spending a lot of time and resources on opportunities where we may suspect problems with power sales agreements, land areas or provisions the banks can’t accept. Asking control questions is easier and more effective when our employees have done the same thing before.”

When interacting with the authorities, especially in developing countries and on renewable projects, it is a major advantage to have a long-term perspective on the investment. Being able to name solid reference cases is important. The financial markets where Scatec Solar operates do not always work optimally. “The final factor is that we have always known partnerships are important for a small company. Development banks like IFC, EBRD and Norfund and multinational banks with a mandate to provide financing in developing countries are crucial to succeeding, and so of course is partnering with Export Credit Norway and and GIEK,” says Tørud.

Partners such as Export Credit Norway, IFC and EBRD often have close ties with the authorities. That, and Norway’s strong reputation abroad, makes it easier for both parties to come to agreement. It also lets Scatec Solar be confident the countries will stand behind their contractual commitments. “We want to be confident the countries will stand by their contractual commitments,” says Tørud. “Having a broad base of support among our financial partners inspires trust and reduces project risk for all parties.”