Foresight Group, an independent infrastructure and private equity investment manager, has acquired the Vale Matanças solar farm located in Alcácer do Sal, Portugal.
The project represents the first investment in a utility scale solar asset in Portugal that does not benefit from government subsidy and is the first part of a larger unsubsidized solar portfolio acquisition plan Foresight is implementing across Portugal, Spain and Italy.
The project has been developed by Exus Management Partners, and it will be built by established EPC contractor Solarig Global Services on a turnkey basis.
When fully operational, the project is expected to deliver 12 gigawatt hours of clean renewable electricity per annum, with income derived purely from the sale of the power generated under a long-term power purchase agreement (PPA) without any governmental subsidy.
The project is expected to have a 25-year operational life in line with typical Foresight infrastructure solar investments. The project will be constructed in an agricultural area covering approximately 18 hectares and is located in one of the highest irradiation areas in the Iberian Peninsula, which, incidentally, is one of the highest irradiation areas in continental Europe.
“At the current cost of the technology, solar assets can operate without separate subsidies and deliver superior risk-adjusted returns for our investors. Grid-parity forms a key part of our long-term strategy as we are looking to consolidate further our leadership as a worldwide solar operator,” said Carlos Rey, senior investment manager at Foresight.
Foresight was advised by law firm Gomez, Acebo y Pombo in the acquisition and structuring of the transaction. The construction of the 7.2-megawatt solar farm project is expected to start in September 2017, with grid connection expected by the year end.
Foresight has £2.6 billion ($3.3 billion) of assets under management across a number of funds. Foresight funds currently manage more than £2 billion ($2.57 billion) in infrastructure assets, including some 80 operating Photovoltaic plants in the United Kingdom, Southern Europe, the United States and Australia, with a generating capacity of more than 900 megawatts.