Italian Sunny Deal
Etrion Corporation has signed a definitive sale and purchase agreement to acquire the 33 megawatt ("MW") Montalto solar power plant from US-based SunPower Corp. for cash consideration of approximately 48 million Euros plus the assumption of the related non-recourse loan facilities. The Montalto plant, which SunPower owns through its recently acquired project development arm, SunRay Renewable Energy, is currently the largest solar power park in Italy.
Marco Northland, the Company's CEO, commented, "We recently announced signing a term sheet for this transaction, and we are pleased to move forward to close the acquisition of the 33 MW Montalto solar park. This acquisition more than triples the size of our company in terms of installed capacity and cash flow and makes us one of the major solar power producers in Italy. We expect to exit 2010 with almost 50 MW in operation and more than 150 MW in pipeline for future development."
The 33 MW solar power plant is expected to produce over 55 million kilowatt hours ("kWh") of electricity and approximately 22 million Euros of cash flow ("EBITDA") per year.
The 33 MW that Etrion is acquiring consists of two projects located on the same site in the Lazio region of Italy near Rome. The first project is 24 MW and was connected to the grid in November 2009. The second project is approximately 9 MW and is currently under construction for completion in August 2010. Both projects are ground-based solar photovoltaic ("PV") power plants using SunPower's high-efficiency PV modules and single axis tracker technology.
The 24 MW project benefits from the 2009 feed-in-tariff of 0.353 Euros per kWh plus a market price of approximately 0.08 Euros per kWh. The 9 MW project is expected to benefit from the 2010 feed-in-tariff of 0.346 Euros per kWh plus a market price of approximately 0.08 Euros per kWh.
The Italian feed-in-tariff is a premium purchase price for renewable electricity that is guaranteed by the Italian government for 20 years from the start of operations.
The 24 MW plant has an existing facility agreement with Societe Generale, Banca Infrastrutture Innovazione e Sviluppo (Intesa Sanpaolo Group) and WestLB for 107 million Euros. Societe Generale's participation in the financing is partially guaranteed by SACE, the Italian export credit agency. The 9 MW plant has an existing facility agreement with Barclays for 40 million Euros.
The acquisition of the 24 MW project has been completed. The acquisition of the 9 MW project remains subject to standard closing conditions and is expected to close by September 30, 2010.
The Company is funding the acquisition through a bridge loan from its major shareholder, Lundin Petroleum.
