Edisun Power has signed a contract to acquire a 49MW photovoltaic construction project in north-eastern Portugal. The project is being sold by Smartenergy Invest AG. The closing of the sale is subject to customary market conditions and should be completed in the second quarter of 2019 at the latest.
There is already an established business relationship between Edisun Power and Smartenergy. In February 2017, Edisun Power purchased the 12MW Requena project near Valencia in Spain from Smartenergy. Since connection in March 2018, the facility has been feeding electricity to the grid at favorable levels of performance. In the context of the new transaction, Smartenergy will acquire an interest in Edisun Power by means of an increase in capital through a contribution in kind.
The 49MW plant heralds a new era for Edisun Power, as the energy produced will be sold on the market without any government subsidies or feed-in tariffs. Thanks to the high levels of solar radiation and low investment costs, production costs will be far below current market prices. In order to secure income for the first few years of operation, the company plans to conclude a PPA (Power Purchase Agreement) with fixed price purchase commitments.
Construction of the plant will begin this year and the facility should be connected to the grid in the first half of 2020. Around 80 million kilowatt hours of electricity will be produced per year from an area of about 65 hectares, which is equivalent to the annual needs of a city with around 20'000 inhabitants. From 2020 onwards, the project will realize a net result of around CHF 1 million on an annualized basis.
The investment will be covered by existing funds, project financing and by a capital increase through contribution in kind. The contribution in kind will result from the issue of 80'715 shares from the authorized capital, whereby Smartenergy will hold a share of around 13.6% in Edisun Power after completion of the transaction.
On the occasion of Edisun Power’s General Meeting on 17 May, a representative of Smartenergy will be proposed for election to the Board of Directors in order to reinforce closer strategic cooperation.