A 16% return on investment is planned in Bulgaria, Aubry de Koster, investor relations officer at Solar World Invest Fund (SWIF), told SeeNews in an interview. The Luxembourg-based private equity company closed a double acquisition in March. It took over from China’s ReneSola two photovoltaic plants in Sliven in the country’s southeast, for an undisclosed price. They have capacity of 5 MW and 4.7 MW.
“For the first two years the fund, which was set up only last year, aims to acquire only operational installations with an existing track record and cash flow as this means less risk for us as an investor. However, next year we plan to go further and add ready-to-build projects, which have higher expected return but, of course, the risk too is higher,” De Koster stated.
The fund, which expects to increase its investment portfolio to between EUR 15 million and EUR 20 million by the end of the year, from current EUR 7 million, is exploring investment opportunities in Romania, the official also said, without disclosing details. Diversification and seizing good opportunities are the key elements of the fund’s strategy, in his words. However, when considering whether to invest in a country, the fund is also looking at the interest rates and the stability of the local currency, De Koster added.
In Bulgaria the fund is looking for projects established in 2011 or 2012, with a lifespan of 20 years, and the credit risk too needs to be considered, he stated said. “Risk in Bulgaria is higher than in, let’s say, Belgium… You have the risk of retroactive policies, too, which could impact your return. On the other hand, the currency risk in Bulgaria is under control because of the fixed parity between the local currency, the lev, and the euro. Furthermore, the country’s renewables market is mature, having attracted a high volume of foreign investment over the past years, which means that expertise and highly-qualified staff which are crucial for due diligence are in place,” he noted.
The combined capacity of power plants in Bulgaria using renewable energy sources that are planned to be connected to the national grid by 2024 amounts to 1.49 GW, the country’s electricity transmission system operator ESO said last year. The share of renewable energy is seen at 14.91% of overall consumption in 2015 while expected to exceed 19% in 2024.