Galp, ACS to set up JV for 2.9-GW Spanish solar portfolio

Spanish construction and engineering group ACS Actividades de Construccion y Servicios SA (BME:ACS) will keep a minority stake in a 2.9-GW solar portfolio that Portuguese oil-and-gas major Galp Energia SGPS SA (ELI:GALP) agreed to acquire earlier this year.

Galp announced on Monday that the two parties’ original deal has been amended so now it gets to acquire a 75.01% interest in the portfolio, while ACS will retain the remaining 24.99%. For this purpose, the two companies will form a joint venture.

The amended agreement will now see Galp pay between EUR 300 million (USD 351.5m) and EUR 350 million at closing for the stake acquisition, down from EUR 450 million initially set, and previous development costs. All development costs going forward will be assumed by the JV and will be project financed, Galp said.

Galp previously expected to project finance the pipeline alone, but did not discard taking on a partner.

The portfolio in question contains 900 MW of already commissioned plants and some 2 GW of projects in different stages of development, which were planned to become operational by 2023. Cobra Instalaciones y Servicios SA, a unit of ACS, will develop and build the portfolio.

The amended agreement is subject to customary conditions, including a nod from the European Commission. Galp expects the transaction to conclude before the year’s end.

Galp's nascent renewables business so far consists of an interest in 12 MW of installed capacity from one wind farm and projects in development.

(EUR 1.0 = USD 1.172)

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