News Article
Etrion, Announces Agreement With ABB, To Complete 10 MW Solar Project
Deal in place following Italian government clarification of incentives
Marco Northland, Etrion's CEO, commented, "We are pleased to engage ABB to proceed with our 10 MW project under construction following the recent Italian government decree clarifying incentives for new solar projects. Based on the new feed-in-tariff and the reduced contractor cost, we expect to maintain our original projected internal rate of return for this project."
The Helios ITA 3 project includes two 5 MW ground-mounted solar PV parks under construction, Brindisi and Mesagne, in the Puglia region of Italy. Construction of the project was voluntarily delayed in order to clarify the Italian feed-in-tariff applicable to projects connected after May 31, 2011. On May 5, 2011, the Italian government approved a decree establishing tariffs for new solar PV plants, and Etrion subsequently decided to proceed with ABB as the new contractor.
Construction of the Helios ITA 3 parks is expected to be completed by August 31, 2011. The first electricity sales from the project under the Italian feed-in-tariff regime are expected during the fourth quarter of 2011.
The Helios ITA 3 parks are expected to receive a feed-in-tariff of EUR0.25 per kilowatt-hour (kWh) plus the market price of approximately EUR0.08 per kWh. The Italian feed-in-tariff guarantees the purchase price for solar electricity by the Italian government for 20 years from the start of operations.
The 10 MW project is expected to produce 16.8 million kWh of electricity and EUR4.6 million of earnings to Etrion before interest, taxes, depreciation and amortization (EBITDA) per year.
In order to accelerate construction of the Helios ITA 3 project, Etrion has received a bridge loan of EUR28 million from the Company's major shareholder, the Lundin family. The bridge loan is interest-free and will mature one year after draw down. Etrion expects to repay the bridge loan upon final draw down of the project's existing non-recourse loan facility with Natixis, WestLB and Mediocreval following grid connection of the Helios ITA 3 solar parks. In consideration for providing the bridge loan, Etrion has issued 6.5 million common shares of the Company to Lundin family trusts.
