LONDON, UK: Aquila European Renewables Income Fund plc (AERIF), suggested by Aquila Capital Investmentgesellschaft mbH, introduced that its wholly owned subsidiary has entered right into a sale and buy settlement to acquire 100% of a 100 MWp photo voltaic PV portfolio (Greco) currently under construction in Spain.
The Greco portfolio consists of two assets which can be found within the area of Andalucía, within the south of Spain, which profit from attractive photo voltaic irradiation yields.
The working lifetime of the Project is conservatively estimated as being 30 years, noting that technical due diligence and existing land leases can support a higher working life. Construction is currently underway with fencing and earthworks activities, while procurement of all main equipment is now full (including photo voltaic PV modules, trackers and inverters).
Completion is contingent upon the Project receiving all of the requisite licenses and authorisations from native authorities (incl. the grid operator) and is anticipated by late 2022.
The Project is anticipated to present 184 GWh of renewable electrical energy yearly over its lifetime, equal to roughly fifty eight kt of CO2 avoidance per annum[1].
Upon Project completion, Greco will increase AERIF’s total portfolio generation capacity[2] by 30% to 432 MW. The addition of Greco will additionally double the portfolio’s overall photo voltaic PV capability to 200 MWp[3] and increase the portfolio’s allocation to photo voltaic PV from 29% to 47%[4] by fair value, with the rest being allotted to wind and hydro technologies.
Under the transaction, roughly EUR ninety million will be paid at Project completion (“Deferred Consideration”), which is anticipated in late 2022. An upfront consideration quantity will be paid at closing under the SPA (together with the Deferred Consideration, “Total Consideration”), noting that the overwhelming majority of the Total Consideration is deferred till Project completion. The Total Consideration paid represents a fixed price for the acquisition and construction of the Project.
To safe payment of the Deferred Consideration, AERIF will present a assure in favour of the parent of the engineering, procurement and construction contractor for as much as EUR 100 million, which will be launched upon payment of the Deferred Consideration amount.
The deal is topic to restricted conditions precedent, with closing anticipated to happen shortly. The Investment Adviser intends to safe a Power Purchase Agreement (“PPA”) for the Project previous to completion. In addition to the Deferred Consideration, the transaction is additionally topic to an earn-out mechanism (“Earn-out”). The Earn-out is calculated as 50% of the worth uplift achieved between the precise PPA price entered into versus a reference PPA price. Payment of the Earn-out is due after Project completion.
The Company intends to fund the Deferred Consideration quantity (including any Earn-out, if applicable) utilizing its surplus liquidity of roughly EUR 144 million[5], which incorporates the undrawn revolving credit score facility (“RCF”) in place (EUR forty million facility limit) and represents the total liquidity available, previous to Greco.
Commenting on today’s announcement, Ian Nolan, Chairman: “We are happy to have the ability to safe one other large scale, excessive high quality photo voltaic PV project, which dramatically will increase our allocation to photo voltaic PV, in-line with our portfolio targets.”
Michael Anderson, Senior Manager at Aquila Capital, the Investment Adviser: “This is a materials acquisition for the Company and enhances the general portfolio balance between wind and photo voltaic technologies, in-line with the longer-term targets for the portfolio. The Deferred Consideration structure, mixed with AERIF’s sources of available liquidity additionally provides significant flexibility to pursue different funding alternatives while ready for Project completion.”
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