Eco Atlantic (LSE:ECO | TSXV:EOG)
Eco Atlantic has formed a new renewables company to develop an exclusive pipeline of low-cost, high-yield solar energy projects.
It represents a major structural investment into renewables by the Africa-focused oil and gas explorer.
Bosses said the move added a “ highly relevant and attractive asset” to its wider portfolio.
The new company, called Eco Atlantic Renewables , will be 70% owned by Eco Atlantic and 30% owned by renewable energy developer Nepcoe Capital Partners.
It was formed to tap into the attractive economics driving renewable solar energy demand, and to support Eco Atlantic’s growth over the next decade.
The joint venture has secured exclusivity to a potential pipeline of more than 2GW of solar photovoltaic projects in Southern Europe.
2020 full year results reinforced Eco Atlantic’s strong cash position, with $18m in the bank and zero debt. A current £50m market cap company primes the company for a re-rate as it broadens its focus into new renewables growth markets.
Eco Atlantic co-founder and CEO Gil Holzman said: “The creation of Eco Atlantic Renewables is very exciting, and the recent shift in energy market dynamics presents compelling, near term opportunities and the potential to grow yet another ground-breaking independent energy company.” Eco Atlantic will provide a shareholder loan of up to $6m for its 70% stake, to be repaid from monetising solar PV assets, from third party investment or from future project cash flows. Eco will retain its majority interest in the JV on repayment. First solar builds
The JV’s first acquisition is the 100% owned 10.57MW Kozanic project in Greece, acquired on 25 January 2021 for €1.1m. This is a fully-licensed and permitted ready-to-build project with an IRR of 9% unlevered and 13% levered.
The JV is also in advanced exclusive negotiations for a 31.25MW project in Spain.Eco Atlantic Renewables is targeting 12%-18% IRR for each of its solar projects, with each held in a separate Special Purpose Vehicle (SPV). This SPV structure will help aid funding and asset-level deals, as well as setting up Eco Atlantic for agreements with state utilities.In its first full year of operation, Eco Altantic Renewables is targeting the development and construction of 100MW of operating grid-connected projects as well as securing the rights to 800MW of projects.European solar projects represent some of highest-growth renewables markets in the world, Eco Atlantic noted, with “ advantageous land prices in prime locations and with premium offtake prices ”.Regulated […]
