The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) is negotiating with Enlight Renewable Energy Ltd. (TASE: ENLT) to buy 40% of a wind energy project in Kosovo acquired by Enlight in March 2018.
Phoenix wants to invest in the project under the same terms as in the Movilim venture through which Enlight and various investment institution have invested in renewal energy projects in the international market. The project in Kosovo will be managed by a special purpose vehicle indirectly held by Enlight.
Movilim has contracted renewable wind energy agreements to date in Ireland, Croatia, Serbia, and Spain, and a solar park agreement in Hungary. The venture has secured its entire €125 million commitment. Enlight owns 50.1% of the venture, Phoenix 20%, Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) 20%, and Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) 9.9%.
The Kosovo project, now in the advanced development stages, will supply 105 megawatts of electricity when completed.
The total projected cost of the project is in the €140-180 million range, including construction, financing costs, and the acquisition of rights. The project has guaranteed entitlement to a quota, and is moving towards completion of its development, including the signing of connection agreements and PPA electricity sale agreements.
Enlight said that it was in negotiations to obtain financing for when it completes the development period. The company also believes that the rate of senior debt leverage will be 60-80% of the projects' total construction cost.
According to the project's production capacity, the company believes that it will generate €25 million a year in gross revenue from electricity sales during the feed in tariff period and €15 million a year after that.
The arrangement entitles the company to €85 per megawatt for 12 years. After the feed in tariff period, electricity sales will be at market prices. The estimate lifespan of the farm is 30 years.
The electricity system in Kosovo is automated; its electricity grid is hooked up to the main European electricity grid, which includes a synchronized network for 25 countries. Kosovo has published targets and regulation for producing 400 megawatts from renewal energy sources, including 150 megawatts from wind energy.
Enlight, formerly controlled by Shaul Elovitch's Eurocom Communications, is managed by CEO Gilad Yavetz without a controlling core. Phoenix owns 9.3% of the company's shares, hedge fund Noked Capital 8.1%, Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) 6.8%, Psagot Investment House Ltd. 9.5% through its provident and mutual funds, and Harel 7.6%.
Published by Globes [online], Israel business news - en.globes.co.il - on October 9, 2018
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