KGAL fund ESPF 5 has entered the Czech market with the purchase of the 50MW solar project PVPP Saxonie (pictured) near the northern Bohemian city of Most.
This is the eleventh transaction for ESPF 5, in its sixth European country. The final closing of this Article 9 impact fund will take place in October 2024.
The Czech Republic is developing into a highly attractive market for investors, with its climate targets having been increased several times, KGAL said.
For example, the capacity of solar power is set to more than double from the current 3.6GW to 8GW by 2030, while the target for wind power is set to triple to 1.5GW.
KGAL co-chief executive André Zücker said: “In order to achieve these targets, investors are receiving state subsidies for their projects.
“Solar and wind projects are responding with dynamic expansion.”
In addition, electricity prices in the Czech Republic show low volatility, and the spot market is traded in euros.
Another special feature of this market is the electricity mix, which still consists of more than 40% coal-fired generation; the CO2 impact is therefore well above the EU average.
Zücker added: “With the climate-neutral electricity from the solar park near Most, our KGAL ESPF 5 fund will achieve a particularly high impact.”
The construction phase will begin shortly and grid connection is planned for the third quarter of 2025. The electricity will mainly be marketed through a long- term PPA.
The seller of the project is Sev.en Inntech a.s. The Czech company also operates the local power grid to which the solar park will be connected next year.