A subsidiary of London-listed Aquila European Renewables Income Fund is to acquire a 100MW solar portfolio currently under construction in Spain.
The Greco portfolio consists of two projects located in the region of Andalucía, in the south of Spain, which benefit from attractive solar irradiation yields.
Construction is currently underway with fencing and earthworks activities, while procurement of all major equipment is now complete.
Completion is contingent upon receiving all of the requisite licenses and authorisations from local authorities – including the grid operator – and is expected by late 2022.
Greco is expected to provide 184 gigawatt-hours of electricity a year over its lifetime.
Approximately €90m will be paid at completion, which is expected in late 2022.
An upfront consideration amount will be paid at closing under the sale and purchase agreement, noting that the vast majority of the total consideration is deferred until completion of Greco.
The total consideration paid represents a fixed price for the acquisition and construction of the portfolio.
The agreement is subject to limited conditions precedent, with closing expected to take place shortly.
Aquila intends to secure a power purchase agreement for Greco prior to completion.
In addition to the €90m the transaction is also subject to an earn-out mechanism.
The earn-out is calculated as 50% of the value uplift achieved between the actual PPA price entered into versus a reference PPA price. Payment of the Earn-out is due after Project completion.
Upon completion, Greco will increase the fund’s total portfolio generation capacity by 30% to 432MW.
The addition of Greco will also double the portfolio’s overall solar capacity to 200MW and increase the portfolio’s allocation to PV to 47%4 from 29% by fair value, with the remainder being allocated to wind and hydro technologies.