LONDON: Eco (Atlantic) Oil & Gas Ltd. has formed a new company (Eco Atlantic Renewables) with Nepcoe Capital Partners Ltd., a renewable energy developer and investment company, to source, acquire and develop an exclusive pipeline of potential high yield solar projects.
Eco (Atlantic) Oil & Gas Ltd. owns 70% of Eco Atlantic Renewables and the remaining 30% is owned by Nepcoe.
Gil Holzman, Co-Founder and Chief Executive Officer of Eco Atlantic, commented: “We are not a management team that likes to sit and wait for outcomes. Following several months of extensive strategic work and identification of multiple projects by the management team and Board of Directors, this exciting opportunity has crystalised.
Our decision to form this new majority held renewable energy company was partly driven by a lack of oil and gas acquisition opportunities that are as good and as prospective as the ones we already hold.
While we remain focused and fully committed to achieving near term exploration success in Guyana and Namibia, we are fully aware of the global energy transition that is firmly underway. The creation of Eco Atlantic Renewables is a clear demonstration that Eco Atlantic is responding to the changing marketplace.
We have structured the new venture in such a way that our oil and gas assets in Guyana and Namibia remain the core of our business, we have retained adequate near term financing and both of our regions continue to demonstrate significant potential for our shareholders.
The creation of Eco Atlantic Renewables is very exciting, and the recent shift in energy market dynamics presents compelling, near term opportunities and the potential to grow yet another ground-breaking independent energy company.
Eco Atlantic’s skill set is diverse, and we are leveraging our capacities, knowledge and experience of integrated project management, land and lease management, offtake agreement negotiations, and contractual negotiations and financial structuring within the public and private financial sector.
Combined with our highly prospective exploration acreage and our discoveries in Guyana, Eco Atlantic has added a highly relevant and attractive asset to its portfolio.”
Eco Atlantic makes a second oil discovery offshore Guyana
Eco Atlantic is seeking to create additional shareholder value by applying its experience in integrated projects, direct negotiating with governments, and being agile within the renewable energy sector, while continuing to drive forward its core oil and gas assets in Guyana and Namibia.
Pursuant to the Eco Atlantic Renewables joint venture shareholders agreement, Eco will have the right to nominate a majority of the Eco Atlantic Renewables board.
The opportunities already identified within Eco Atlantic Renewables have significant potential, and Eco Atlantic Renewables will be targeting a circa 12% – 18% IRR for each project. Each project is expected to be held within a separate Special Purpose Vehicle (“SPV”) to facilitate SPV level funding arrangements and potential asset level dealings as well as separate agreements with state utilities.
Eco Atlantic Renewables is focused on identifying, securing, and developing projects in the solar PV sector. Eco Atlantic Renewables’s immediate objective is to deliver value to investors through a portfolio of international solar PV projects.
A number of the opportunities in its pipeline, including the recently acquired Kozani project in Greece, are fully contracted, permitted, and build ready, and in first stages towards financial closing whereas others are in various development and permitting stages.
The focus will be on projects featuring a combination of one or all being able to benefit from Europe’s best solar irradiation and those strategically located in markets with advantageous land prices in prime locations and with premium offtake prices.
Benefiting partly from regulated revenues and long-term fixed power purchase agreements, these asset classes constitute attractive investment opportunities with additional sustainability features.
In line with Eco Atlantic Renewables’ strategy to acquire development and ready-to-build solar PV projects in Europe, and to construct and develop such projects to produce a portfolio of up to 2GW of solar power, the ready-to-build and advanced development stages projects that have already been identified in our pipeline include the following:
· Greece – 10.57MW (wholly owned having been acquired on 25 January 2021),
· Spain – 31.25MW (in advanced stages of exclusive negotiations),
· Canary Islands – 100MW (exclusive option),
· Italy – 800 MW (exclusivity secured).
The ready to build projects have in place a secured grid connection, environmental permits, building permits and lease or purchase agreements on the land. Projects are subject to full financing in the form of equity and customary project finance.
The Kozani project in Greece is estimated to cost c.US$10m (including the aforementioned acquisition price) to construct and to commence electricity production. As the project has a feed in tariff by the Greek Grid Operator it is expected to be funded largely from project debt financing with the balance expected to be provided by Eco Atlantic Renewables through the project SPV.
Further funding required by Eco Atlantic Renewables is expected to be sourced through Eco Atlantic Renewables, independently of Eco Atlantic.
European Solar Market:
The European solar PV market is experiencing a period of high growth, with an increasing speed of development. Numerous European Governments are promoting the development of solar power, as it is often cheaper to generate than other power sources, and they are increasingly taking it into consideration when developing their climate strategies.
Eco Atlantic Renewables has a pipeline of low cost, high yield solar PV projects in Europe, with the potential to generate returns for investors. Management estimate that the first development identified in Greece will deliver an IRR of approximately 9% (unlevered) and 13% (levered). Eco Atlantic Renewables believes there is considerable room to expand, given it has access to an exclusive pipeline of more than 2 Gigawatts in southern Europe.
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