KGAL ESPF 5 has successfully entered the promising Czech market with the purchase of the 50-megawatt solar project "PVPP Saxonie" near the northern Bohemian city of Most. KGAL has partnered with Sev.en Inntech and Micronix for the realization of the solar park. This marks the eleventh transaction for ESPF 5 in its sixth European country. The final closing of this Article 9 impact fund will take place in October 2024.
“In order to achieve these targets, investors are receiving state subsidies for their projects,” explained Andre Zucker, Co-CEO of KGAL. “Solar and wind projects are responding with dynamic expansion.” In addition, electricity prices in the Czech Republic show low volatility, and the spot market is traded in euros.With the climate-neutral electricity from the solar park near Most, our KGAL ESPF 5 fund will achieve a particularly high impact.”
Another special feature of this market is the electricity mix, which still consists of more than 40% coal-fired generation; the CO2 impact is therefore well above the EU average.
The construction phase will begin soon, and grid connection is planned for the third quarter of 2025. The electricity will primarily be sold through a long-term power purchase agreement (PPA).
The project is being sold by Sev.en Inntech a.s. This Czech company also operates the local power grid to which the solar park will be connected next year.
Petr Lenc, a general manager and vice-chairman of the board of Sev.en Inntech a.s., said: “We decided in favour of KGAL for two reasons: First, we were impressed by the asset manager’s many years of experience with renewable energies. Second, the discussions proved KGAL’s intensive focus on the potential of this project.”
The solar park “PVPP Saxonie” is a renewable energy project developed by Sev.en Inntech a.s. in the post-mining area of the former lignite quarry CSA, located in the Most district. This project is part of the company’s extensive portfolio of sustainable and innovative initiatives both within and outside the Czech region of North Bohemia.
As an EPC service provider, Micronix is responsible for the construction of the solar park. Since the company will also acquire a minority stake in the project, there is an even greater interest in completing the project on schedule. KGAL has already worked successfully with Micronix in the past.
“Over 80% of the €350m in equity has already been allocated and 43% deployed,” emphasised Florian Martin, Co-CEO of KGAL. “Through its investments, our impact fund covers all life cycle phases from project development to operations. Investments are generally made at an early stage in order to participate in a large part of the value creation.”
“We significantly exceeded our original plans and are now aiming for a clear double-digit return for ESPF 5,” explained Florian Martin. “As the fund has also invested in three successful developers in Germany, Italy and Spain, our investors have access to a total of more than 200 projects – an unprecedented diversification with enormous potential for the coming years.”
Institutional investors still have the opportunity to participate in this portfolio at the final closing in October. The rendering shows what the solar park will look like after completion. For use of
images, please quote Sev.en Inntech.
Image provided by Blue Hour Communications.
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