Under the agreement, Eiffel Transition Infrastructure 1, an Eiffel-managed fund launched in Nov’22, will make an initial equity investment of ~$16mn in the pipeline to acquire a minority stake. The capital will be used to develop the pipeline and secure the necessary permits. Eiffel will also provide additional financial support to the portfolio during construction, through equity funding. Green Genius will lead the development process until the projects are ready for construction, which is expected to start by the end of 2023.
Enerdatics observes that M&A activity in Italy’s solar space has been increasing steadily since 2020, with the deal volume YTD 2023 reaching nearly 50% of the 2022 level. In Nov’22, the secretary of the Italian renewables association ANIE Rinnovabili - Michelangelo Lafronza - stated that he observes increased investor interest in the country’s solar sector by domestic as well as international players, following several years of limited growth. Lafronza attributed the forecast to several measures taken at the bloc and national level during the past year, driven primarily by the urgent need to reduce energy costs across the continent. Among the measures proposed is an EU-wide regulation to speed up the renewable energy permitting process - approved in Jan’23 - which limits the permitting time for solar projects to three months. Enerdatics believes that the regulation has been instrumental in spurring a wave of renewable energy partnerships in Europe in 2023, with companies rushing to tap high-growth markets such as Spain, Italy, Germany, and Poland. Other recent partnerships in Italy include Altea Green Power’s JV with Aer Soleir to develop a 300 MW solar project pipeline and Enerside Energy Partners’ collaboration with Alternative Green Energy to develop over 2.6 GW of PV assets.
Enerdatics also observes that while debt has been the prevalent source of capital for renewable energy development in Europe, the proposed debt-equity bias reduction allowance (DEBRA) will eliminate the unequal advantages of debt financing and promote equity investments. The proposal allows companies to deduct increases in equity capital from their taxable corporate income, similar to how interest rates are deductible. The aim of this proposal is to avoid an over-reliance on debt funding in the bloc and improve the resilience of the region’s capital markets. If approved, the proposal could become effective at the national level from January 1st, 2024.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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