Bulgarian renewable energy group Elana Holding mulls launching a solar energy equity fund to be listed on the Sofia bourse as part of its business development plans which also envisage attracting investors for its wind farm projects, a senior company official said.
Elana Holding, active in the solar, wind and energy efficiency business, is developing small solar park projects for private investors that are subsidised under a European Union programme for rural areas development, and plans to also start developing parks with higher capacity that could attract bigger investors, the group’s manager Ivan Gerginov told SeeNews in a recent interview.
“We do not rule out an option to set up a solar [energy] fund which will trade on the Bulgarian Stock Exchange and which will be a low-risk and safe investment that will be attractive in such a dynamic market where investors do not have a clue if prices will go up or down,” Gerginov said.
“It would be an investment which will bring a steady profit in the range of 10-12% per year, with a high-level of predictability.”
Elana Holding has so far developed 25 solar parks with a combined capacity of 2.3 megawatts (MW) and annual output of 3,380 megawatthours (MWh) and by the end of the year it will have developed 50 parks, Gerginov said, adding that the group is currently working on 13 parks with an average capacity of 80 kilowatts (KW) each.
The group intends to further expand in the sector and start developing solar parks with a capacity of over 1.0 MW for which it will seek investors.
“Our intention is to develop such big parks as there are big opportunities for economies of scale and with the current tariffs […] such projects are attractive,” Gerginov said.
A megawatthour of electricity produced in solar parks costs 823 levs, VAT excluded, for parks with an installed capacity of below 5.0 KW and 755 levs, VAT excluded, for parks with an installed capacity of over 5.0 KW.
Elana Holding has so far developed seven wind farm projects with a total capacity of 445.5 MW and annual production of 852,599 MWh. Its practice is to either build a park of its own seeking bank financing, or to develop a project jointly with strategic investors as the average cost per megawatt installed wind farm capacity is between 1.2 million and 1.5 million euro.
“Considering the market situation, projects that will be completed next year will be most probably carried out with partners,” Gerginov said. “We are in search of a strategic partner with experience in the energy sector such as CEZ, E.ON, EVN, i.e. companies which have already developed such projects.”
Elana Holding could also participate in a project as a shareholder by converting the projects' development costs into equity. The investment costs can either be shared or entirely secured by the strategic investor, Gerginov said.
“The development of a project itself is equal to 10-15% of the total investment, i.e. we should get roughly a 10-15% [stake] [...] Of course, this range depends very much on the wind in the certain region,” Gerginov said.
Elana Holding expects to get a construction permit for a 27 MW wind farm in southern Bulgaria - wind power farm (WPF) Popsko in July. The estimated investment is 58 million levs ($41.3 million/29.6 million euro) and talks with a potential investor are expected to be wrapped up in the next months, he added.
The holding company has already sold its 50 MW Vetrino project to a foreign company investing in renewable energy projects in the country, Gerginov said without elaborating. The project is expected to obtain a construction permit in July. The wind farm, located about 50 kilometres west of the city of Varna, on the Black Sea, is designed to produce 82,500 MWh of electricity a year.
Bulgaria, which joined the European Union in 2007, has seen rapid growth in renewable energy recently as it must cover 16% of its electricity consumption with power generated from renewable sources by 2020, compared to below 10% now. At the end of 2008 it had wind farms with an installed capacity of 160 MW and solar parks with an installed capacity of a little more than 1.0 MW.
(1 euro = 1.95583 Bulgarian levs)
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