Sale of Spanish solar energy farms to generate €25m for Irish investors

Green energy developer Arclight selling electricity plants in deal valued at €68m

Irish investors are in line for a €25 million payout following the sale of Spanish solar electricity plants.

Green electricity developer Arclight is selling its Spanish solar farms in a deal valued at €68 million.

The sale will realise €25 million for Irish investors who backed the development in 2008 with a total of €40 million.

Arclight has not named the buyer, but it is understood to be Plenium Partners, part of Spanish lender Bankinter.

It received €20 million two years ago when the farms refinanced their original debt with the issue of a €43 million green bond that listed on the Frankfurt Stock Exchange. US fund Blackrock was the sole investor in the debt.

Plenium is taking on the bond and paying €25 million for the equity in the Spanish solar generators, putting a total price tag on the venture of €68 million.

Arclight's asset manager, Quintas Energy, will continue in that role under the new owner.

Quintas and Arclight intended to run the electricity business for the long term, but decided to consider a sale after several likely buyers expressed interest in it.

The company is also pursuing claims for between €25 million and €30 million against the Spanish state for breach of contract after it cut tariffs pledged to renewable electricity generators in 2010 and 2012.

Quintas is taking the claims through a recognised arbitration process overseen by the World Bank.

Further payouts

The claims could result in further payouts to its Irish backers should they be successful. Quintas has already put aside the cash needed to fund the action.

Quintas director Fintan Corrigan described the claims as solid and pledged that the company would pursue them aggressively. "The sale of the assets is not the end of the story," he added.

The Irish backers put their cash into Arclight’s Spanish project either directly or through their pension funds in 2008.

Quintas managing director Declan O’Halloran said the difficulties encountered in the Spanish projects’ early days, including tariff cuts, sparked fears that they could have to write off their investment.

“We always looked after the underlying generating assets,” he said, adding that the investment environment and risk appetite ultimately changed.

Quintas Energy director Tim McCarthy noted that management made a long-term commitment to the investors.

Mr O’Halloran argued that the transition to green electricity depended on the ability of companies such as Quintas to build and run renewable energy businesses at the lowest possible cost.

Quintas says it is the biggest independent asset manager in the solar power industry.

The company employs 200 people in offices in Cork, Seville, London, Rome and Brisbane, Australia.

It manages farms in Spain, Italy, Britain and Australia, with the capacity to produce 4,000 megawatts (MW) of electricity and is working on projects with the ability to generate a further 1,400MW.