The renewable energy fund KGAL ESPF 5 is entering into a joint venture with Italian power specialist IMCS to jointly develop four battery energy storage systems (BESS) totalling 1100MW in Italy.
The emerging market for energy storage systems is gaining strong political support, as BESS can be used to mitigate the increasing fluctuations in electricity production from renewable energies, said the former, adding the technology contributes to the portfolio diversification of its Article 9 fund.
The plan is to develop four BESS assets, with a total capacity of 1.1GW. The joint venture offers the opportunity to develop the projects at an early stage and sell them when they are at ready-to-build status.
The expected return significantly exceeds the target return of KGAL ESPF 5, it said.
The fund added joint venture partner IMCS has many years of experience in the development and realisation of large-scale solar projects in Italy.
KGAL has already realised several PV projects with its Italian partners for the predecessor fund KGAL ESPF 4.
“With its highly qualified interdisciplinary team, IMCS is the ideal joint venture partner for developing BESS projects efficiently and promptly through to approval,” said KGAL co-chief executive André Zücker (left).
Fellow co-chief executive Florian Martin (right) added: “This strengthens the basis on which we can continue to offer our ESPF 5 investors a double-digit return in the future.”
Institutional investors have until October 2024 to participate in the final fund closing.
“We are pleased to enter the emerging market for battery energy storage systems in Italy with our trusted partner KGAL at a strategically favourable time,” said chief executive at IMCS and leader of the group of developers that own IMCS Raffaello Giacchetti.
“Now is the right time: Italy needs to build new energy storage systems with a capacity of at least 15 gigawatts by 2030 to meet the targets of the national energy strategy.”