Greece’s PPC doubles portfolio in Romania with acquisition

Greece-based Public Power Corp. (PPC) is taking over an operational portfolio of 629 MW in renewables and battery storage in Romania from funds managed by Macquarie Asset Management. The deal struck by the government-run utility includes 145 MW under development.

PPC isn’t slowing down the pace of its expansion in Romania, while continuing to seek other opportunities in Southeastern Europe for enlarging its green energy portfolio. The Greek government-controlled utility said it entered a binding agreement with Evryo Group on the acquisition of facilities in operation with a combined 629 MW in capacity and another 145 MW of assets in the project pipeline.

The firm is owned by funds managed by Macquarie Asset Management, headquartered in Australia. The agreement has a total enterprise value of approximately EUR 700 million, subject to customary adjustments, PPC said.

The enterprise value of the assets changing hands is estimated at EUR 700 million

The acquisition strengthens the group’s growth strategy in Romania and Southeast Europe, the announcement adds. It added 600 MW of onshore wind, 22 MW in hydropower, 6 MW of operating power in the battery energy storage systems (BESS) segment and 1 MW in photovoltaic capacity.

PPC left out the details, but purchases of ripe projects are accelerating in Romania. In addition to a thriving solar power market, wind power investments are picking up and, more importantly, investors are starting a wave of groundbreaking ceremonies.

Transaction includes giant wind park Fântânele-Cogealac

Evryo was until April known as CEZ Group. Czech energy company ČEZ Group agreed in 2020 to sell its seven businesses in Romania to infrastructure management firm Macquarie Infrastructure and Real Assets (MIRA). The deal included the 600 MW Fântânele-Cogealac-Gradina onshore wind park, Europe’s largest at the time. The facility will now belong to PPC.

Of note, Axpo, an energy trading firm headquartered in Switzerland, arranged a seven-year deal in 2021 for 50% of electricity from Fântânele-Cogealac-Gradina.

The new transaction also involves a 1 MW floating solar power plant near Reșița in Caraș-Severin county, in Romania’s far west. The PV unit is located on the reservoir of the Grebla small hydropower plant. It is part of a group of four hydropower facilities of 22 MW in total, being taken over by PPC.

The acquisition is making the Greek company the biggest renewable electricity producer in Romania after Hidroelectrica, surpassing EDPR. Evryo Group still owns Distributie Energie Oltenia, one of the country’s regional electricity distribution system operators.

PPC to grow total operational asset portfolio to 5.3 GW

Upon completion of the agreement, the renewables portfolio that PPC has in operation in Romania will nearly double and the group total reaches 5.3 GW. Currently the installed capacity in the country amounts to 707 MW.

Just before the takeover disclosure, the company said today in a presentation of the results from the first half of 2024 that it has secured 80% of the capacity it needs to hit its 2026 renewables target of 8.9 GW. It had 4.7 GW in operation at the end of June and 3.3 GW under construction or ready to build.

PPC confirmed it aims to phase out coal in electricity production by 2026. In just a footnote, it acknowledged that it officially commissioned the new Ptolemaida 5 plant of 660 MW in the second quarter. PPC completed the facility already in late 2022 and inaugurated it in February of last year. Total coal power capacity in its home market was 2.3 GW at the end of the first half of the year.

The company said it has extensive experience in operating green energy projects and a substantial solar pipeline in Greece. The funding structure keeps the leverage ceiling well within the target, it added.

PPC Group estimated the added annual earnings before interest, taxes, depreciation, and amortization (EBITDA) at EUR 100 million upon completion.

Transaction closure expected by fourth quarter

Citigroup Global Markets Europe AG and Euroxx Securities SA are the financial advisors and Clifford Chance is the energy company’s legal advisor for the takeover.

PPC expressed the expectation that its acquisition would close by the fourth quarter. It is subject to conditions including antitrust approval.