GM Marketplace: Land investment with PV Plant in Spain

23/07/2019 | greenmatch AG

The target of the sale is the 100% interest in Monteblanco Energia SL. Monteblanco Energia is a Spanish SPV holding a piece of 70ha of land in Extremadura region that is rented to a 18MW operational solar park. The Spanish SPV therefore has got an asset (land) and a long-term cash flow generation (landlease contract). We are selling the SPV debt free and with a long term landlease contract that guarantees an inflation-protected income until 2042. This solar land investment delivers a very robust cash flow profile over more than 20 years due to the seniority of landlease payments in the cash flow cascade of any project financed solar asset.

Marketplace Land SpainThe structure of the land lease comes with a step up. It starts with 160.000 euros annually and then goes up to over 1 million euros per year in 2032. We have modelled this asset on greenmatch taking into account the projected land lease payments and a terminal value at the end. The valuaton of Monteblanco is 5 million euros. The investor who buys Monteblanco will get a highly secured 4% unlevered IRR with the real possibility to increase that return by adding some low cost leverage (below 2% cost).

So, in summary, these are the main terms:

  • Land & lease contract SPV
  • Lease payments related to a Solar Plant with FIT in Spain
  • Inflation-protected income
  • Fully derisked 4% unlevered IRR
  • Upside of 200-300bps by adding low cost leverage

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