Wind Eastern Europe
Creation of LUKERG Renew, a joint venture in the renewable energy sector
On 20 May 2011 ERG Renew and LUKOIL-Ecoenergo signed an agreement for the creation of a 50-50 joint venture, LUKERG Renew, which is to be based in Vienna.The transaction comes within the scope of a Memorandum of Understanding between ERG Renew and LUKOIL (see Press Release dated 12 July 2010) for cooperation in the market of renewable energy sources in the countries of Eastern Europe and in Russia.
The joint venture will initially focus its operations on Bulgaria and Romania, followed by Ukraine and Russia, developing both organically and through the pursuit of acquisition opportunities.
LUKERG Renew acquires a 10% market share by purchasing a 40 MW wind farm
LUKERG Renew has signed an agreement with Raiffesein Energy & Environment, an entity of the Austrian Raiffesen Bank Group, for the purchase of a 100% equity interest in a wind farm in Bulgaria, in the region of Dobrich, with an installed capacity of approximately 40 MW, operational since 2009.
ERG Renew enters the Romanian wind market through the acquisition of a wind farm
project with a planned capacity of 84 MW
Acquisition of Gebeleisis wind farms in Romania and Hrabrovo wind farms in Bulgaria
On 20 June 2013 LUKERG Renew, a joint venture of ERG Renew (100% ERG) and LUKOIL- Ecoenergo entered into two agreements with Vestas for the acquisition of 100% of two already operational wind farms (total installed capacity, 84 MW): Gebeleisis in Romania and Hrabrovo in Bulgaria.
The Gebeleisis wind farm is in the region of Galati (Romania); it has been fully operational since February 2013 and it has a total installed capacity of 70 MW (35 WTG Vestas V90-2 MW) and an expected average annual generation of over 165 GWh. The enterprise value of the acquisition is EUR 109.2 million (approximately EUR 1.56 million per MW).
The Hrabrovo wind farm is in the region of Dobrich (Bulgaria); it has been fully operational since March 2012 and it has a total installed capacity of 14 MW (7 WTG Vestas V90-2 MW) and an expected average annual generation of over 34 GWh. The enterprise value of the acquisition is EUR 17.6 million (approximately EUR 1.26 million per MW).
The transaction strengthens the strategic partnership between ERG Renew and Vestas and it enables ERG significantly to speed up the achievement of the growth targets in Eastern Europe set out in the business plan for 2015. Moreover, as a result of these acquisitions and of the construction of the wind farm in Romania, ERG Renew’s installed capacity abroad will reach approximately 20% of the whole portfolio.
With regard to the Gebeleisis wind farm, the transaction was closed on 28 June 2013, whilst closing for the Hrabrovo wind farm, subject to the approval of the Bulgarian Antitrust Authority, is expected in the second half of this year. As a result of the closing of the two transactions, the adjusted consolidated results of the second half of 2013 will benefit from the contribution of the two wind farms. Adjusted net financial indebtedness of the ERG Group as at 30 June 2013 reflects the impact of the Gebeleisis transaction, amounting to EUR 55 million. The electricity generated by the two new plants will curtail CO2 emissions into the atmosphere by approximately 77 thousand tonnes per year.