Soltec signs 100 million financing agreement with Incus Capital to boost asset management and operation business

Soltec Power Holdings
January 16, 2023

The financing is intended to support the growth of the asset management and operation business (Soltec Asset Management).

With this operation, the Company strengthens its objective of becoming a vertically integrated IPP (Independent Power Producer) of relevance in the renewable energy sector.

Soltec, a leading Spanish listed company in the renewable energy sector, has announced the signing of a EUR 100 million financing agreement with the credit fund advised by Incus Capital to finance its renewable asset management and operation business (Soltec Asset Management).

With this transaction, Soltec seeks to enhance and accelerate the growth of Soltec Asset Management, its division dedicated to the investment, operation and management of renewable energy infrastructures, and guarantees the construction and commissioning of part of the projects in the development division's portfolio, mainly in Europe (Spain, Italy) and Brazil.

The Company announced in 2022 the start-up of this new division as part of its objective to gradually become an IPP (Independent Power Producer), as part of the vertical integration strategy contained in its 2022-2025 Strategic Plan. Soltec has two other lines of activity: the industrial division and the project development division.

For Soltec CEO Raul Morales, "This transaction allows us to vertically integrate and begin to crystallise the real value of our renewable business, while providing us with the necessary funds to continue with our ambitious roadmap for the coming years..

For this transaction, Soltec has relied on Mirabaud's investment banking team as financial advisor and Uría Menéndez as legal advisor.

In turn, Incus Capital has relied on Taiga Mistral as technical advisor and Linklaters as legal advisor.

13.7 GW under development globally

The development division's (Soltec Development) pipeline totals 13.7 GW of projects (at the end of September 2022) in varying degrees of progress, spread across eight countries: Spain, Italy, Denmark, Romania, Brazil, Colombia, the United States and Mexico.

The division shows a very positive evolution and a very balanced and geographically balanced exposure of its project pipeline, with 46% in Europe and 54% in the Americas.

The development division aims to develop the projects to RTB ("Ready to build"), and at that point sell them to a third party, or to the asset management and operation division (Soltec Asset Management), which is expected to have a portfolio of close to 1 GW by 2025.

There are currently 117 MW in operation corresponding to two projects in Spain and Brazil, and the Company has 112.5 MW under construction in Brazil, corresponding to the Araxá project (Minas Gerais, Brazil), which will be connected to the grid in the short term, and 5 MW in Spain, which will be completed in 2023.

A competitive advantage: vertical integration

Last year, Soltec began the implementation of its Strategic Plan 2022-2025, through which it announced the creation of a new business line dedicated to asset management: Soltec Asset Management. Through this division, the company expects to obtain an additional flow of income from the sale of energy that will provide recurrence, solidity and stability to the company. It also allows it to differentiate itself from its competitors and maximise the value of its projects, mitigating existing risks in the value chain thanks to geographical and business diversification.

In the roadmap it has designed for the coming years, Soltec expects to achieve revenues of between 780 and 840 Mn euros through its three lines of activity (industrial, project development and asset management). The Company aims to achieve an EBITDA in the range of 100-120 Mn euros in the period set out in the Strategic Plan.

It expects to achieve this as a result of the synergies between the different divisions and the recurrence and strength provided by vertical integration, as well as the growth prospects of the solar industry in the coming years.

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