The wind projects acquired by EDPR through this deal comprise 4 Tier 2 wind projects totalling 108 MW, 98 MW of Tier 3 projects, and 314 MW of projects classified as prospects. While the average national long-term working hours of wind turbines in Italy is ~1,775 hours or a ~20% load factor, EDPR expects to deliver a 3-4% premium load factor on its wind farms as a result of the prime locations of these projects.
The amount paid for the above mentioned stake is €12 million (Enterprise Value) and additional success fees will be paid as the wind projects reach certain predefined milestones.
Through this transaction EDPR acquires a quality pipeline in Italy and incorporates a team with a strong local expertise and track record on the Italian renewable sector, with an accumulated experience in the development and construction of 125 MW.
The entrance in the Italian market, will allow EDPR to be exposed to one of the most attractive countries in Europe given its strong regulatory framework, enabling the company to selectively diversify its growth options and expand its European footprint.
The Italian wind market has a high growth potential due to its current stage of development. With 4.9 GW of wind installed capacity in 2009 (1.1 GW up on 2008), Italy is one of the most promising wind markets in Europe, boosted by the renewable obligation quota set by the government which required 5.3% of the electricity supply in 2009 to be sourced from renewable technologies. This target will rise to 7.6% by 2012 (requiring an estimated wind installed capacity of 10.5-13.5 GW by 2012).
The Italian wind market also benefits from a remuneration scheme. A green certificate system is in place, whereby renewable generators receive tradable green certificates for the first 15 years of operation in addition to the market electricity price.
In 2009, the average market price amounted to €152/MWh, of which €64/MWh related to the average electricity market price and €88/MWh related to the average green certificate market price. Under the current regulation, the annual deficit or excess of green certificates in the market vis-à-vis the obligatory quota, is managed by the market operator (GSE), that issues new certificates or buys the excess of certificates at a certain predefined regulated price.
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