Enlight Renewable Energy announced it has completed negotiations and signed an agreement to buy the rights in a 100-MW wind energy project in the Qawqaz state Georgia. The project is under development and expected to reach completion within 18-24 months.
As of today, the project has already secured part of the rights in the relevant lands and is in the process of achieving environmental permits. It is in an area characterized by favorable wind conditions based on measurements conducted over several years. Furthermore, the project may expand with an additional 200 megawatts, subject to increased wind energy quotas in Georgia, and additional conditions there.
The developers behind the project include an engineering company with extensive experience in developing wind energy projects in central and Eastern Europe, and a local Georgian development company.
The company has entered a memorandum of understandings with Georgia’s government and is negotiating a detailed framework agreement, which is expected to include the Power Purchase Agreement (PPA), and which will anchor the project’s right to be connected to Georgia’s national grid.
The PPA will be entered at the expected feed-in tariff of US$ 65 per megawatt hour for nine months every year, over a period of 10 years. The sale of power in the remaining three months will be made under market conditions. At the end of the 10-year PPA period, the power will be sold at market prices.
The total cost of the project is estimated at $135-155 million, including construction, financing costs, and the acquisition of project rights. The gross revenues from the project are estimated at $18-21 million a year during the PPA term, and an average of $25-30 million a year after that. The expected EBITDA from the project will be around 80%.
The completion of the first milestone of the purchase transaction hinges on several conditions’, mainly signing of a framework and PPA agreement with the Georgian government.
The project is covered by the current quota allocated by Georgia’s government for wind energy, at initial capacity of 250 megawatt. Georgia’s power market relies mainly in hydroelectric plants, until today. Following the joining of Georgia to the European Energy Treaty, the Georgian government has pledged to support further renewable energy development, and recently adopted a National Renewable Energy Action Plan (NREAP) and new legislation in the field setting renewable energy targets of 35% of total Energy consumption by 2030.
It was clarified that there is no certainty regarding the completion of the development of the project, which is subject to several variables and, inter alia, obtaining the full approvals and permits required for its establishment, including the signing of the framework agreement as described above.
Enlight Renewable Energy, founded in 2008, trades on the Tel-Aviv-125 Index. With 97% of its shares held by the public, Enlight is a leading company in the development, financing, construction, and operations of renewable energy generation projects. The company has operations in Israel and Europe with a diversified portfolio of income-generating projects that total over 750 megawatts. An additional 550 megawatts are in advanced stages in preparation for construction, and 1,500 megawatts more are in initial development stages. Enlight enjoys consistent growth in revenues from long term electricity sales of its yielding assets, and in parallel increasing its diversification to additional markets and clean energy segments.