ERG’s subsidiary ERG Power Generation has agreed to acquire 100% stake in solar plants with total capacity of 89MW, located in Italy and managed by ForVei.
The funding for the transaction, which values ForVei at €336m, includes a non-recourse project financing of about €180m along with lease agreements of about €60m.
This acquisition marks the entry of ERG into Italian solar market. The transaction is expected to be completed in next January, subject to approval from antitrust authority’s approval.
ForVei is a joint venture between VEI Green and Foresight, which owns and operates 30 solar plants across eight regions in Northern and Southern Italy. These solar plants were commissioned between 2010 and 2011 and with a total capacity of 89MW, with an annual output of 136GWh.
The solar plants have been able to offset about 77,000 tons of CO2 emissions annually. The entire installed capacity is claimed to be eligible for incentives with average expiry dates of 2030.
ERG CEO Luca Bettonte said: "Acquisition of this important 89 MW photovoltaic platform marks ERG's entry into the solar energy sector and constitutes a further significant piece of our technological diversification strategy.
“The notable size of the transaction will immediately enable us to enlarge and optimise our Energy Management portfolio, with high quality facilities geographically well located also in the market area of Northern Italy, and to capitalise on our industrial skills in asset management.”
ERG claims that it is entering the Italian solar market at a time when there is a fragmented market scenario that can bring additional opportunities to integrate and allows the company to gain technical know-how to take part in cross-border development of an expanding sector.
In October, the company agreed to acquire two French wind farms with a total capacity of 16.25MW and has signed an agreement for co-development of projects totaling 300MW also in France.
The wind farms include the 12MW Parc Eolienne de la Voie Sacrée and the 4.25MW Parc Eolienne d'Epense, which were commissioned in 2007 and 2005 respectively.
ERG will acquire 75% of the stake in the two wind farms from Vent d'Est and the remaining 25% stake will be held by Renvico France.
Image: This is the foray of ERG in to solar power in italy. Photo: Courtesy of RK008/FreeDigitalPhotos.net.