Ellomay seals PPA for 300-MW Spanish solar project

Israeli renewables company Ellomay Capital Ltd (TASE:ELLO) has struck a power purchase agreement (PPA) for its 300-MWp Talasol solar photovoltaic (PV) project in Spain.

The company’s wholly-owned subsidiary Talasol Solar SL has executed a financial power swap in respect of roughly 80% of the output of the solar park, which will be built in the municipality of Talavan, Ceceres. The 10-year contract was agreed with an international energy company, whose name was not disclosed. Ellomay, however, noted that this company has a solid investment grade credit rating and a pan-European asset base.

Talasol anticipates to sell the power produced by the solar park in the open market, Ellomay said, adding that the PPA hedges the risks associated with fluctuating electricity market prices. It is structured as a hedge of the plant's capture price rather than base load price, the developer explained.

The estimated capex for the project ranges from EUR 200 million (USD 233m) to EUR 230 million, including development costs of about EUR 20 million. The scheme will be financed by a group led by Deutsche Bank and the European Investment Bank (EIB). Talasol expects to achieve financial close by the end of the year and start commercial operations at the site in the first half of 2020. It calculates that the plant will generate revenues of between EUR 20 million and EUR 25 million a year.

(EUR 1.0 = USD 1.164)

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