Ellomay Capital’s Spanish subsidiary Talasol Solar has signed an agreement to sell power generated by its Talasol Project to an international energy company for a period of 10 years.
Under the power purchase agreement (PPA), Talasol will supply nearly 80% of the output from the prospective photovoltaic plant in Talaván, Cáceres, Spain, with a peak capacity of around 300MW.
The undisclosed international energy company has an investment grade credit rating and a pan-European asset base, with operations in over 40 countries.
The PPA will enable Talasol to gain a stable income and evade the potential risks associated with the volatile electricity prices in the open market.
As the PPA is structured as a hedge of Talasol Project’s capture price rather than base load price, it will provide the subsidiary an optimal hedge for the Talasol Project’s revenues.
Based on the present technical analysis, a price projection analysis and the expected hedging effect of the PPA, the Talasol Project’s revenues are expected to be currently in the range of €20-25m per annum.
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By GlobalDataAs the expected operation expenses are €6m per annum, the net operation income, revenues net of operation expenses are expected to be €14-19m per annum.
The Talasol Project is expected to be financed by a consortium led by Deutsche Bank, which is the mandated lead arranger, and the European Investment Bank (EIB).
Financial closing of the project is expected before the end of 2018 and commencement of operations is expected in the first half of 2020.
