PV developer Alight has signed a PPA with food retail group Axfood, to build a 64MW solar park in Sweden.
The scale of the solar park unlocks the possibility to use non-recourse project financing for the first time, signaling a shift in feasibility of large-scale solar in Sweden, Alight said.
Alight will build, own and operate the solar farm in Hallstavik outside Norrtälje, Sweden, and Axfood will purchase the clean energy at a low, fixed price for 12 years.
This will help Axfood to better hedge against market volatility.
Thanks to Axfood’s commitment to buy energy from the project, Alight can invest in the project and add new renewable power capacity to the Swedish grid.
The solar park, which will be about 71 hectares (equivalent to 101 football fields), will deliver an expected annual production of about 63GWh (equivalent to the electricity consumption of roughly 12,600 villas).
This makes it roughly three times larger than any solar park in Sweden at the estimated date of commissioning, Alight said.
Construction will begin this week and the solar park will be operational in Q2 of 2024.
Axfood and Alight had originally investigated the possibility of building a solar park in Skåne, but have now instead jointly chosen the area in Hallstavik due to the land’s low natural values.
At the same time, the project will promote biodiversity by installing wood mold boxes, bat houses and sand beds for bees, among other things.
The park will be Sweden’s first solar asset financed with a dedicated non-recourse debt facility – a type of financing used extensively to finance wind assets in the Nordics and solar assets in other parts of Europe. As first movers in Sweden, Alight has experienced a strong appetite among lenders to finance the company’s quickly growing pipeline of PPA backed solar assets. While solar parks in Sweden have been historically financed with equity, the shift to debt financing signifies Sweden’s state of readiness for the next wave of major solar developments. For the Hallstavik project, SEB, a leading northern European financial services group, will provide the debt financing. Alight was advised on the financing by Newsec Infra, acting as financial advisor, and MSA, acting as legal advisor.
Harald Överholm, CEO at Alight, says: “Combating climate change is truly an all-hands-on-deck challenge and it’s exciting to see one of Sweden’s most respected companies, Axfood, taking the lead in enabling the buildout of more renewable energy. We’re proud that this will be Sweden’s largest solar park at the time of commissioning, and the fact that this is the first time non-recourse project financing will be used to build a solar park in Sweden is also a great milestone that signifies a promising shift in the feasibility of renewable energy projects to come.”
Klas Balkow, President and CEO at Axfood, says: “While we have our sights set on continuing to reduce our environmental impact, we also want to contribute to increasing the amount of renewable electricity on the market. By partnering with Alight, we’re proud to be able to drive the development of Sweden’s largest solar park to bring more green energy to the country.”