KGAL has acquired a majority stake in an Italian solar and wind developer with a 300MW pipeline.
The acquisition of the stake in Baltex Progetti is for impact fund KGAL ESPF 5.
Together with its Italian partner, KGAL will complete the pipeline projects and operate these as an independent power producer (IPP).
A few months after the first closing, this is already the fourth transaction for KGAL ESPF 5 and further investments are imminent, KGAL said.
Baltex Progetti is planning solar parks in Sardinia and Sicily as well as wind farms in Emilia Romagna.
The first power plants are scheduled to be grid-connected in 2026.
During the operational phase, they will remain under the ownership of the developer, who will then act as an IPP.
Beyond the initial pipeline, the investment offers further growth potential.
“For KGAL ESPF 5, holding a majority stake has the major advantage of securing access to a broadly diversified, promising project pipeline in the highly competitive renewables market via just one transaction.”, said Michael Ebner (pictured), managing director and head of sustainable infrastructure at KGAL Investment Management.
“Moreover, we will cover the entire value chain from the early development phase to the subsequent operation of the plants as IPP.
“Accordingly, we expect to achieve an above-average return on the investment.”
He said Baltex Progetti will benefit from the partnership as well, as KGAL will contribute its expertise in financing, structuring, procurement and offtake agreements, besides the equity required for construction and operation.
With this fourth transaction, KGAL ESPF 5, which announced its first closing in December 2021, has already allocated more than 50 percent of the equity raised to date.