Galp completes acquisition of 75% shares in 2.9 GW Spanish solar portfolio

Galp and ACS have completed the transaction for the creation of a joint venture (JV) to develop 2.9 GW of solar photovoltaic projects in Spain.

Galp acquired 75.01% of the target solar company, while ACS will keep 24.99%. A joint control governance structure has been set up and the stake will be booked in Galp’s financial statements under the equity method.

The completion is the outcome of the January 2020 agreement with ACS to establish a JV between the two parties. All partner and authority approvals have been received for this amended agreement.

The transaction includes photovoltaic power plants under operation with an installed capacity of 900 MW. It also comprises projects underway or in the licensing stage to bring the total installed generating capacity to 2.9 GW by 2023, enough to supply the average consumption of 1.8 million households across Spain. They will also contribute to avoiding the emission of an equivalent 87 million tons of CO2.

The development and construction of the portfolio will be made by Cobra, an ACS affiliate.

Galp has paid EUR326 million (US$384.8 million) to ACS for the stake acquisition and development costs associated with the portfolio. The target company currently has EUR434 million (US$512.3 million) of non-recourse debt related to the operating assets, and the partners intend to project finance the remaining developments. The transaction considers an enterprise value of EUR2.2 billion or (US$2.6 billion) related to the acquisition, development, and construction of the entire portfolio.

Citigroup Global Markets and King & Wood Mallesons acted as financial and legal advisors to Galp, respectively.