Solar Project 1

Executive Summary

(“the Company”) seeks to raise €9.7 Million in equity to build a 25MW solar PV power station in Ukraine. Due to the high solar tariff of 15 Euro cents and low cost of construction, the projected investor return is 23.7% (IRR) per annum for 20 years, totaling €51.1 Million to the investor. Construction cost are fixed under contract, setup cost are fixed under contract, operating cost are fixed under contract, and production (revenue) rate is guaranteed by law and backstopped by a 92% Performance Guarantee. On top of this the projected IRR is backstopped by the project developer. In short, there are no major loose ends. The result is a predictable and profitable investment.

The Strategy

The company is a Special Purpose Entity (SPE), for the purpose of building and operating a solar power station in Ukraine. The strategy is to acquire the pre-staged project, which is ready to start. All construction cost, operating cost and revenue will be locked before receiving the equity investment. In order to limit the equity investment required, a phased build-out will be employed.

The Business

The business is straightforward; the Company intends to build a nominal 25MW solar PV power station in Ukraine. Given; the high green tariff, record low construction cost, and the security of long term fixed price contract, the company recognizes the opportunity to develop this business with minimum risk and high return for investors.

Financing

The Company is seeking to raise €9.7M from an equity investor. The equity investor is offered 94% ownership of the Company. The investment will be used in a phased build-out approach, to leverage around (i.e. not use) a construction loan, which are not commonly used in Ukraine. The facility, post construction, will leverage €14.9M in bank debt (operating loan) for a total project cost of €24.5 Million. The Developers will carry a €1.1M construction bridge loan until the end of construction. The financing will be used to:
  • Buy the developed, permitted and ready to build Solar Project
  • Pay for materials and construction (turnkey EPC contract)
  • Bridge construction without requiring construction loan
  • Pay financing fees
  • Fully commission the project

Grid Connection

All grid connections are pre-negotiated with the electric power company to assure the projects will not have any significant delay in connection to the grid after construction. Logistically the connection process is simple. After construction, the contractor formally request the electric power company to be connected to the grid. The electric power company does the final connection, for a substantial fee. This fee is set depending on the complexity of the connection and the required upgrades. Ironically, the connection fee is nearly equivalent to the cost of independently negotiating a new PPA with a utility in the West. The advantage is that the process is faster and with a more definite outcome, than negotiating a new PPA.

Solar Feed in Tariff (FIT)

The solar feed in tariff (FIT) is €0.15 per kilowatt-hour (kWh). In order to rapidly grow solar energy, legislation backed by the IMF support, fixes the FIT until 2030. This is one of the highest FITs in the Europe today. After 2030 the price reduces to the standard wholesale rate. 


Further information
Contact us and request full business plan and / or financial model