Vector Renewables has provided financial and legal advisory services in the sale of a 7.5MWp portfolio owned by Greenpower Generation (Grupo Kolya Renovables) and acquired by the London company MithraSol.
The portfolio adds up 6 solar PV projects, with a total installed capacity of 7.5MWp and located in Castilla la Mancha (Spain). All the projects are currently under development and two of them are expected to start construction by the end of 2020. The other two will be completed in Q2 2021.
Through its M&A line, Vector Renewables has led this transaction assisting the client in the structuring of the operation, coordinating and supervising the Due Diligence process, providing support in the negotiation of the binding offer and assisting from a commercial-financial point of view during the contracts negotiation. Likewise, through its Legal department, Vector Renewables has provided legal advice in the preparation, among other documents, of the exclusivity letter and leading the review and negotiation of the transaction contracts until their formalization, in particular the sale and purchase contracts.
Kolya Renovables is a company specialized in the development of photovoltaic solar energy projects and based in Madrid and Mexico. Currently, the firm develops a 2,200 MWp portfolio in Spain, Mexico, Australia and the USA.
Vector Renewables has participated as a financial advisor in renewable energy transactions totalling more than 4.6 GW, not only in Spain but also abroad. The firm has been a leading advisor in renewable energy transactions (both on the sale and buy sides). At the same time, Vector Renewables has participated in the financing and refinancing of renewable energy projects worldwide, taking as a competitive advantage its deep knowledge of the entire value chain, as well as his relationship of trust with the most important stakeholders in the sector and his experience in the subsequent management of renewable energy assets.
The company currently manages renewable energy facilities totalling more than 2.9 GW around the world, making it one of the largest third-party portfolios managed by a single company in the renewable energy industry.
VECTOR RENEWABLES email@example.com
KOLYA RENEWABLES firstname.lastname@example.org
MITHRASOL info.Mithrasol@merlqart.comRead More
Extraordinary complex situation, challenges us to be more supportive with our clients and look toward the future
COVID-19 has rapidly spread, affecting almost all countries worldwide. Latest economic consensus have shown a general and significant GDP drop, especially relevant in those markets highly dependent on external demand and/or labor-intensive sectors, like the Spanish market. As a result of the health crisis, Government has declared the alarm status, which has a wide variety of implications, many of them impacting the power sector:
• Economy lockdown has led to a relevant decrease in power demand. Combined with the commodities low-trend price observed during the weeks previous to COVID-19 crash, have resulted in historical wholesale electricity low prices.
• Pool and future markets low-price scenario are putting a lot of pressure on off-takers, who are showing a downward trend in PPA prices.
• Delay in the administrative procedures. This has an immediate impact on the development process and construction schedules for renewable energy projects affecting economic projections.
• Financing of renewable energy projects is going through an uncertainty situation which may postpone financial close but also might force financial institutions to revisit their terms and conditions.
• Renewable energy operating projects may face working capital stress situations driven by current retribution parameters as they were calculated considering a complete different pool price scenario compared to existing one.
All the above shows an extraordinary complex situation which challenges renewable energy stakeholders to move fast in order to enhance their business strategy. From Vector Cuatro, we have performed a deep dive on key drivers to provide our clients with a continuous support. Our closeness to the market through a strong network together with our wide in-house expertise, allows us to have 360 picture and enable us to become a reliable partner in the renewable energy industry.
Our M&A and Financial Advisory team is continuously monitoring market updates, factoring any input to adapt opportunity assessment. We are especially active in M&A transactions, on the sell-side helping our clients in maximizing asset value and on the buy-side advising on valuation and structuring to optimize return to shareholders.
Do not hesitate to get in touch with our team requiring any kind of support. Our M&A and Financial Advisory team would be more than happy to support you whatever your concern may be.Read More
Mexico is among the top 10 most attractive countries in the world with the highest investment in renewable energy.
Currently, Mexico is in a situation of uncertainty and risk because the new Government of López Obrador has positioned itself against renewable energy auctions. In turn, the president of CFE (Federal Commission of Electricity) has requested the three previous auctions project contracts to be renegotiated.
So far, in Mexico, three auctions have been carried out in the years 2015, 2016 and 2017, and a fourth was planned for 2018, however, last January, the last clean energy auction was cancelled.
Despite this, the situation also represents an opportunity to obtain high returns for those willing to assume this risk. The abundance of solar resources, the high prices of energy, the decrease in technology costs and the growing need for diversification of resources combine to place Mexico among the world leaders for photovoltaic development.
The Mexican economy is growing at a good pace. The Secretaría de Energía (SENER) expects energy demand to grow at 3% during the period 2018-2032, as well as retirement of nearly 12 GW of existing capacity in the same period.
SENER is implementing a Clean Energy Certificates market, based on the obligation of large consumers to have a minimum level of consumption from clean energy, from 5% in 2018 to 13.9% in 2022.
Also, price of electric power in Mexico is very high: in nominal terms, it is 73% higher than in the United States. Citizens do not realize this because 95% of households obtain an electric subsidy that covers up to 90% of their receipt. Even after the subsidy and adjusting for purchasing power, electric power in Mexico is still 25% more expensive than in the United States. Mexico spends 0.75% of its GDP subsidizing electricity tariffs.
Despite the negative impact of the cancellation of the 4th auction, the current uncertainty, and the multiple challenges that await it, solar energy in Mexico is still in very good shape. Bilateral PPAs viability is already a fact in Mexico and the expansion of this segment could lead to a more sustainable market. It is worth mentioning as recent success stories of long-term PPAs the one of the French Engie with the steel producer Gerdau Corsa for a photovoltaic installation of 130 MW and a Balam Fund’s 35 MW photovoltaic plant that supplies Farmacias del Ahorro.
According to a report published by Bloomberg New Energy Finance, worldwide, the volume of energy consumed by companies that have decided to be supplied by clean energy and specifically through the bilateral market reached a record of 13.4 GW in 2018. Mexico is part of this global trend and between 2008 and 2017 PPAs were signed for a total of 3.4 GW, mostly from wind projects. Main sectors that have led this trend are: cement, malls, financial, mining, steel, consumer and automotive godos.
Vector Cuatro M&A and Financial Advisory business line provides its clients with tailor-made market reports covering, inter alia, country and sector analysis, development and connection process description, market price hedging (PPA and auction) description, tax memo, asset valuation analysis including expected returns and comparable transactions in the market, financing structures definition.
In addition, Vector Cuatro M&A and Financial Advisory business line is well experienced on the valuation of PV and wind projects through the preparation of financial models covering development, construction and operations.
Finally, Vector Cuatro provides potential investors with local investment opportunities according to the specific investor requirements and intermediates between large consumers and project owners in order to negotiate bilateral PPA agreements.Read More