The subsidy free mega project is entering the next stage of its development. Funding is expected to be finalized in 4Q 2018 and commissioning in 2020. The project, funded by the European Fund for Strategic Investments (EFSI) will retail its electricity on the spot market, but will be secured through a financial hedge.
Ellomay Capital Ltd. made an announcement that it has received approval for project financing under the European Fund for Strategic Investments (Juncker Plan). The Talasol Project located in the municipality of Talaván, Cáceres, Spain has a system rating of 300 MW.
Ellomay, disclosed on June 6th this year that it had plans to involve the European Investment Bank in the financing package of the project. Additionally, Ellomay mandated Deutsche Bank AG to structure non-recourse senior debt financing for the Talasol project, and that financial close is expected in the fourth quarter of 2018.
In January this year, Ellomay said that depending on the EPC cost, it expected that “the Talasol Project’s CAPEX will amount to approximately €200 million, including development costs of approximately €20 million and interest of approximately €7 million.”
The project was conceived outside any national auctions and is expected to retail its generated electricity through the national spot market. Ellomay has secured a binding term sheet with an undisclosed international hedge provider for a power financial hedge for its 300 MW Talasol PV project in Spain.
The company said the financial hedge will cover between 3,500 GWh and 3,700 GWh of power over a 10-year period, which the facility will sell to the spot market starting from 2020 when the plant is expected to be operational.
“The hedging provides that if the market price goes below a price underpinned by the PPA, the hedging provider will pay Talasol the difference between the market price and the underpinned price, and if the market price is above the underpinned price, Talasol will pay the hedging provider the difference between the market price and the underpinned price,” Ellomay said in its statement.
This kind of contract, enables the project’s owner to be granted power prices within a range established by the financial hedge contract – also when spot prices are under this range.
The subsidy free project received final approval by Spanish authorities In July 2017. Aside from the actual plant, the Talasol project also consists of a 400/30 kV substation and a 23.7 km-long 400/30 kV high-voltage line for the connection of the facility to the local grid.
Source PV Magazine