Eco Atlantic launches renewable energy company

Strategy

Eco Atlantic is seeking to create additional shareholder value by applying its experience in integrated projects, direct negotiating with governments, and being agile within the renewable energy sector, while continuing to drive forward its core oil and gas assets in Guyana and Namibia.

Pursuant to the Eco Atlantic Renewables joint venture shareholders agreement, Eco Atlantic will have the right to nominate a majority of the Eco Atlantic Renewables board.

The opportunities already identified within Eco Atlantic Renewables have significant potential, and the company will be targeting approximately 12% - 18% Internal Rate of Return (IRR) for each project. Each project is expected to be held within a separate Special Purpose Vehicle (SPV) to facilitate SPV level funding arrangements and potential asset level dealings as well as separate agreements with state utilities.

Eco Atlantic Renewables is focused on identifying, securing, and developing projects in the solar photovoltaic (PV) sector. Its’ immediate objective is to deliver value to investors through a portfolio of international solar PV projects. A number of the opportunities in its pipeline, including the recently acquired Kozani project in Greece, are fully contracted, permitted, and build-ready, and in first stages towards financial closing, whereas others are in various development and permitting stages. The focus will be on projects featuring a combination of one or all being able to benefit from Europe’s best solar irradiation and those strategically located in markets with advantageous land prices in prime locations and with premium offtake prices. Benefitting partly from regulated revenues and long-term fixed power purchase agreements (PPAs), these asset classes constitute attractive investment opportunities with additional sustainability features.

In line with Eco Atlantic Renewables’ strategy to acquire development and ready-to-build solar PV projects in Europe, and to construct and develop such projects to produce a portfolio of up to 2 GW of solar power, the ready-to-build and advanced development stages projects that have already been identified in the pipeline include the following:

• Greece – 10.57 MW (wholly owned having been acquired on 25 January 2021)
• Spain – 31.25 MW (in advanced stages of exclusive negotiations)
• Canary Islands – 100 MW (exclusive option)
• Italy – 800 MW (exclusivity secured)

The ready-to-build projects have a secured grid connection, environmental permits, building permits and lease or purchase agreements on the land. Projects are subject to full financing in the form of equity and customary project finance.

The Kozani project in Greece is estimated to cost approximately US$10 million (including the aforementioned acquisition price) to construct and to commence electricity production. As the project has a feed-in tariff by the Greek Grid Operator, it is expected to be funded largely from project debt financing, with the balance expected to be provided by Eco Atlantic Renewables through the project SPV.

Further funding required by Eco Atlantic Renewables is expected to be sourced through the company itself, independently of Eco Atlantic.

Structure of the new venture and loan

Eco Atlantic has agreed to provide a secured loan of up to US$6 million to Eco Atlantic Renewables, as a result of which it now holds a 70% shareholding in the company, with Nepcoe holding the remaining 30%. The loan bears 2% annual interest, which will accrue and is expected to be payable from the proceeds of either a public or private financing, through operating cash flow, or a project monetisation event. In time, it is intended that Eco Atlantic Renewables will be a standalone business from Eco Atlantic. The Board of Eco Atlantic will assess the ability for shareholders to participate directly in the financing of Eco Atlantic Renewables when it seeks to raise the necessary funds for capturing more project opportunities and/or the construction of the projects within its pipeline, for which a number of options are being actively considered.

Management team of Eco Atlantic Renewables

The management team of Eco Atlantic Renewables will be comprised of experienced renewable energy specialists and engineers within Nepcoe and the experienced integrated project management members of Eco Atlantic’s executive team and Board. In addition, as operations commence, and the pipeline continues to build, specific project managers will be appointed at project and/or country level.

Read the article online at: https://www.energyglobal.com/special-reports/26012021/eco-atlantic-launches-renewable-energy-company/