Construction of the projects is scheduled to begin in the second half of 2010, with the first one coming on-line in early 2011 and the remainder in stages before the end of 2012. Electricity production is projected to be approximately 100GWh per annum.
Under the terms of the agreement, Reservoir will acquire a 25% interest in the portfolio by providing equity contributions of $1.5m payable by the end of March 2010, $2.5m payable by the end of May 2010 and $2m payable by the end of January 2011.
Debt financing for the projects is anticipated to be arranged through Turkish banks, with the current shareholders of the portfolio providing the remaining equity funding. Reservoir will acquire an additional 50% interest in the portfolio (for a total of 75%) for $17m, which will be paid in stages as the projects are completed and fully operational.
Miles Thompson, chairman of Reservoir, said: “This acquisition is attractively priced at approximately $1m per megawatt, with most of the payments only due upon completion of the projects. It provides the company with near-term operating assets and cash-flow over the next two years while we advance the Brodarevo projects in Serbia through to production.”
The project portfolio also includes an application for a seventh license (approximately 6MW) that will be included in this transaction if granted. The company expects to work with the current shareholders to acquire additional pipeline projects in the coming months.
