ERG, Quercus form Italian PV-focused JV

ERG SpA (BIT:ERG) and Quercus Assets Selection Sarl today said they will form a 60/40 joint venture to acquire solar systems smaller than 1 MW in Italy.

The incorporation of ERG Q Solar1, to be based in Genoa, is to take place by the end of September. It will have a 150-MW target by end-2021.

Italian energy company ERG, which has 1.8 GW of wind and over a gigawatt of hydro, cogeneration and solar parks in its portfolio, will contribute its industrial and financial competencies to the new public limited company. European renewables-focused fund Quercus will contribute its knowhow via the management of possible target selection activities and coordination of negotiations.

“Financial approach and industrial discipline will be increasingly the recipe for success, particularly as regards such a specialist market as that of small-scale solar power, where the presence of a local team like ours becomes fundamental at both negotiation and post-acquisition management stage,” said Quercus Chairman, Vito Gamberale.

ERG Q Solar1 will be solely focused on the Italian photovoltaic (PV) market and will invest a maximum amount of EUR 350 million (USD 406m) in the next three years. It will aim for at least a low-double-digit equity Internal Rate of Return (IRR).

ERG will appoint four of the seven members of the board of directors, including the chairman and CFO, while Quercus will appoint the other three, the CEO included. Both partners will have the option to dissolve the joint company if it fails to achieve minimum progressive objectives in terms of megawatts acquired.

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