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Solid investor appetite for renewables in the CEE region

We at xFigure, as a project finance and M&A advisor with renewables and energy transition as a focus sector, are actively monitoring the deal activity in Central and Eastern Europe and the going market rates for legacy assets, pipelines of ready-to-built projects and recently commissioned power plants.

Our region saw а revitalized interest in renewable energy projects over the past few years which also translated into a heightened deal activity and scramble for quality projects and credible pipelines. So far, we have seen mainly local developers and foreign energy players with significant presence in the region be the most active participants on the scene. In this material, we are going to introduce you to some of the iconic deals in the sector in recent years and most active and fast-growing RES developers in the region:

  1. One of the first big acquisitions on the Bulgarian market was that of the Karadzhalovo PV park (which has changed ownership several times since its COD). In September 2020, Vienna-headquartered IPP Enery completed the acquisition of an operational 60.4 MW Solar asset in what is to date one of the largest renewable deals in Bulgaria. The total consideration was estimated at EUR 100 million and the implied deal multiples were 6.5x Revenue and 8.2x EBITDA. The solar park was built in 2012 and operates under a long-term feed-in-tariff arrangement.
  2. MET Group, A prominent pan-European energy group that has both presence and outlined interest in the regional renewables sector, has been very active on the market recently, acquiring the operational Suvorovo wind farm in Bulgaria (60 MW) in 2021, as well as a 60 MW greenfield solar project in Poland and a 52 MW PV plant in Romania, set to reach COD in 2024. In a separate statement, the Swiss group has revealed its intention to amass an operational portfolio of 500 MW renewable energy assets in the CEE region by the end of 2023.
  3. Greenvolt, a newly formed company that specializes in the development of renewable projects, acquired a 45 MW solar park in southern Romania with a reported deal value of EUR 83 million and transaction multiple of 6.93x EBITDA. The deal was announced in May 2022, and the syndicated loan transaction was closed in June 2022. The PV plant is operational since 2013 and its revenue is partially generated through a market component according to a statement released by the acquirer. As the seller (Samsung) has experience in regional renewable energy transactions, we suspect that slightly lower energy yield, higher market risk as well as lower expected asset lifespan (at time of deal closing) are among the factors that influenced the valuation.
  4. Alternus Energy, an Ireland-based renewable energy developer with operational renewable power plants in Southern as well as in Central and Eastern Europe announced a merger with Clean Earth, a NASDAQ-listed special purpose acquisition company, in October 2022. The combined company is set to pursue the acquisition of additional 800 MW+ of renewable energy projects and oversee the completion of additional 649MW currently under development according to reports. The company owns or plans to acquire renewable assets in Poland, Greece and Romania.
  5. The Three Seas Initiative Investment Fund (3SIIF), a joint investment vehicle between several countries in the region, will invest EUR 150 million (with option to increase the investment to EUR 250 million) in R. Power, a Polish independent power producer with renewable projects in several EU countries, including Romania and Poland. The funds will be used by R. Power to achieve 1 GW of total installed capacity in the next two years as well as develop its EPC and O&M subsidiaries. Further deal details are pending as the deal was announced in early February 2023.

2021 and 2022 gave us clear indication about the strong interest in renewables globally. The focus on clean energy infrastructure spilled over to the CEE region as well where foreign players and domestic developers are searching to both acquire functional assets and fill their target pipelines for the upcoming years. The relative scarcity of wind and solar projects under operation in our region provides an additional opportunity to developers with well-structured local projects.

xFigure has advised on number of greenfield and M&A transactions related to renewable energy and the energy transition. Whether you are an institutional investor or a corporate looking for opportunities in the Bulgarian and CEE markets, we can support you with local insight, great partner network and understanding of the region’s key advantages.

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