Israel-based renewable energy company Ellomay Capital has secured a power purchase agreement (PPA) for its Spanish solar project Talasol with an output of 300MW.
Image: Solar Farm. Photo: Courtesy of ced dec/FreeImages.com
As part of the PPA, about 80% of the electricity generated from the solar project located in the municipality of Talaván, Cáceres, Spain, will be sold to a leading international energy company for a period of 10 years.
The company has a solid investment grade credit rating and a pan-European asset base, which is active in more than 40 countries and has a proven track record in financial hedges.
Electricity generated from the Talasol project is expected to be sold in the open market for the then current market power price. The PPA is expected to hedge the risks associated with fluctuating electricity market prices by enabling Talasol to secure a stable income for the power production included under the PPA.
Based on technical analysis of the design provided by the engineering, procurement and construction (EPC) contractor of the project, the project is expected to generate 545GWh of clean energy per annum.
Talasol’s CAPEX is expected to be €200-300m, including development costs of about €20m and interest of €7m.
Revenues for the project are expected to be in the range between €20-25m per annum, based on present technical analysis.
Financing for the project is expected to come from a consortium led by Deutsche Bank, which is the mandated lead arranger, and the European Investment Bank (EIB).
Financial closing for the project is expected before the end of this year and commencement of operations is expected in the first half of 2020.
Earlier this month, Ellomay Capital announced that Talasol Solar was discussing the possibility to receive financing from the European Investment Bank (EIB).