LONDON, UK: Aquila European Renewables Income Fund plc (AERIF), the London-listed investment company advised by Aquila Capital Investmentgesellschaft mbH has entered into a sale and purchase agreement (SPA) to acquire 100% of a 30 MWp operating solar PV asset (Tiza) for an undisclosed amount, with closing expected by Q3 2022.
Tiza is located in the Almería region, in the south of Spain, which benefits from attractive solar irradiation yields. The asset has an assumed operating life of 30 years. Construction of Tiza was recently completed and the asset has already commenced producing electricity and generating revenue, taking advantage of current high power prices observed in Iberia.
Combined with AERIF’s recent announcement of the Project Greco acquisition, Tiza will increase AERIF’s total solar PV portfolio generation capacity to 230 MWp[1] and increase the portfolio’s solar PV allocation to approximately 50%[2] by fair value, with the remainder being allocated to wind and hydro technologies. Together with AERIF’s existing solar PV projects, Tiza adds to the technology diversification targets of the Company and strengthens AERIF’s presence in the Iberian Peninsula.
AERIF expects to fund the transaction using its current surplus liquidity, which is approximately EUR 130 million[3], comprising existing cash on hand (approximately EUR 90 million) plus the existing revolving credit facility (EUR 40 million), which is currently undrawn and matures in April 2023.
AERIF’s revolving credit facility (“RCF”) also benefits from an accordion option which allows for an increase in the facility limit from EUR 40 up to EUR 100 million, as well as a 12 month extension option, subject to lender consent. AERIF is currently in discussions with its existing RCF lenders to exercise the accordion and extension option, in order to prudently accommodate existing forward commitments (Greco and Tiza) and provide funding flexibility for further pipeline opportunities.
Closing under the SPA is subject to Provisional Acceptance of the plant (as per the existing engineering, procurement and construction contract), RCF lender consent, signing of a Power Purchase Agreement and other conditions, which are expected to be satisfied by Q3 2022 (unless waived by the Company). Under the SPA, AERIF is entitled to all economic profits generated by the asset up until closing under the SPA and this will be reflected as a post-closing adjustment to the purchase price.
Tiza is expected to provide 54 GWh of renewable electricity annually over its lifetime, representing approximately 62 kt of CO2 equivalent avoidance per annum[4]. The construction of Tiza, which was managed by Aquila Capital is also a testament to the benefits of environmental integration, which included:
· Project layout spread across 5 separate parcels of land to ensure landscape integration
· Introduction of a number of biodiversity measures, including a restoration plan and relocation of olive trees
· Over 10 rabbit refuges built
· Introduction of a natural barrier of plants around the perimeter
A video showcasing the construction and other features of Tiza can be found on AERIF’s website. A link to AERIF’s website is included at the end of this announcement.
Ian Nolan, Chairman of the Company, said: “We are pleased to have committed over EUR 120 million in capital in relation to both Greco and Tiza following the successful capital raising last year. We look forward to securing a PPA and a successful closing of the transaction.”
Commenting on today’s announcement, Michael Anderson, Senior Manager Aquila Capital, the Investment Adviser: “Tiza is an excellent addition to AERIF’s portfolio and will directly contribute to dividend cover in 2022. Tiza’s operating status also enables it to capture high market prices which are currently being observed in Iberia.”
Leave a Reply