Ellomay Capital Ltd. Announces Completion of Conditions Precedent Under the Conditional License of the Manara Project, Including Financial Close and Execution of EPC and O&M Agreements US – English US – English
TEL-AVIV, Israel, February 14, 2021 / PRNewswire / – Ellomay Capital Ltd. (US NYSE; TASE: ELLO) (“Ellomay“or the”Society“), a producer of renewable energy and electricity and developer of renewable energy and electricity projects in Europe and Israel, announced today that all preconditions have been met under the conditional permit issued for the pumped storage hydroelectric project to be built in the Manara Cliff, Israel (the “Manara project“). The Company indirectly owns 83.333% of Ellomay Pumped Storage (2014) Ltd. (the”CPS“), which owns the Manara project.
The Manara project is expected to cost around 1.53 billion shekels (approximately $ 472 million). Among the conditions fulfilled is the financial closure of the long-term project financing facilities for the Manara project (the “Project funding“), the performance of an engineering, procurement and construction contract (the”EPC Agreement“) and the execution of an operation and maintenance contract (the”Operation and maintenance agreement“) for the Manara project.
Funding for the project will be provided by a consortium of Israeli banks and institutional investors, organized and led by Mizrahi-Tefahot Bank Ltd. Funding for the project amounts to a total of NIS 1.18 billion (approximately $ 364 million), and comprises: (i) a senior secured tranche at a fixed interest rate (with a base interest rate equal to the yield to maturity of the Israeli Treasury bonds of the same term of the loan), linked to the Israeli consumer price index and to be repaid over a period of 19.5 years from the date of commercial exploitation; and (ii) a guaranteed subordinated tranche at a variable interest rate (Banque de Israel rate plus spread) with a slightly shorter maturity. The weighted average annual interest rate spread of the Project Finance is approximately 3.3% during the construction phase and approximately 2.5% during the commercial operation phase. Project Finance includes customary conditions relating to early prepayment, acceleration of payments in the event of certain defaults and limitations on distributions. Project Finance also includes ancillary facilities such as Standby, VAT, Guarantees and Debt Service Reserve facilities for a total amount of approximately 146 million shekels (approximately $ 45 million). The default ADSCR is 1.05: 1.00.
75% of SPC is owned by Ellomay Water Plants Holdings (2014) Ltd. (“Ellomay water“) and the remaining 25% is owned by Sheva Mizrakot Ltd. (“Sheva“). 66.667% of Sheva is owned by Ampa Investments Ltd. (“Ampa“) and the remaining 33.333% is owned by Ellomay Water. As a result, the Company owns (through its direct interests in SPC and through its interests in Sheva) 83.333% of the Manara project, and the remaining 16.667% of the Manara project is owned by Ampa through its holdings in Sheva. Sheva and Ellomay Water have committed to providing global funding of approximately 353 million shekels (approximately $ 108.7 million), in proportion to their holdings in the Manara project.
Project finance includes mandatory fund transfers on certain coverage ratios and other events, fund transfer payments under subordinated loans, and other lender protection mechanisms. In addition, the project finance agreement allows the shareholders of the Manara project to withdraw a development commission on the actual completion date (as that term is defined in the project finance agreement) of the Manara project, under reserve the availability of funding, provided certain coverage ratios are met.
The Company and Ampa have provided certain sponsor support commitments to the lenders depending on the size and complexity of the project and the length of the construction period.
In addition, the Company has undertaken, in connection with the financing of the project, to maintain control of the Manara project and to provide user collateral on the assets and rights of the project. SPC shareholders have pledged their shares, shareholder loans and the shareholder mezzanine loan.
The EPC agreement was executed under a “turnkey” contract with Electra Infrastructure Ltd. (“Electra infrastructure“), one of that of Israel larger construction companies. The aggregate consideration payable to Electra Infrastructure under the EPC contract is expected to be approximately 1.1 billion shekels (approximately $ 338 million). In accordance with the EPC Voith Hydro agreement, the world’s leading manufacturer of hydroelectric turbines (“Voith Hydro“) has been appointed as the subcontractor who will supply the electromechanical equipment to the Manara project.
The O&M agreement was signed with Mekorot Israel National Water Co., the Israeli national water company (“Mekorot“), 100% owned by the Israeli government, Voith Hydro and Verbund Hydro, one of the largest hydroelectric companies in the Europe with great expertise in the operation of hydroelectric power plants. The O&M agreement provides that O&M contractors will be involved in the construction process during a mobilization period and that O&M services will be provided for a period of twenty years, during which Mekorot, Voith Hydro and Verbund will provide O&M services for the first three years, with Mekorot providing O&M services exclusively for the remaining 17 years.
The Manara project has also received tariff approval from the Israel Electricity Authority as well as a building permit. The construction period of the Manara project is expected to be 62.5 months. Construction is expected to begin after receiving approval from the Israel Electricity Authority that the conditions precedent are met, which is expected to be obtained in the coming weeks.
Ran Fridrich, CEO and Board Member of Ellomay, said: “Ellomay Capital is pleased to announce the financial close of the Manara project. After a long and complicated period and under very difficult deadlines, the financing, EPC and O&M agreements were executed. The Company considers this project to be a substantial component of the energy storage portion of its asset portfolio and believes that the demand for energy storage will increase. Pumped storage is the most proven, efficient and greener storage technology available. In addition, pumped storage represents the smallest footprint in relation to its storage capacities. The project is expected to have a long operating period with low operating costs. The Company would like to thank everyone involved in the project, mainly the Company employees and advisors who worked tirelessly in a very difficult time and helped the company to achieve this accomplishment. “
About Ellomay Capital Ltd.
Ellomay is an Israel-based company whose shares are registered with the NYSE American and the Tel Aviv Stock Exchange under the trade symbol “ELLO”. Since 2009, Ellomay Capital has focused its activities in the renewable energy and electricity sectors by Europe and Israel.
To date, Ellomay has assessed numerous opportunities and invested significant funds in the renewable, clean energy and natural resources sectors by Israel, Italy and Spain, comprising:
- Around 7.9 MW of photovoltaic power plants in Spain and a photovoltaic power plant of around 9 MW at Israel;
- 9.375% indirect interest in Dorad Energy Ltd., which owns and operates one of the that of Israel the largest private power plants with a production capacity of around 860 MW, representing around 6% to 8% of that of Israel current total electricity consumption;
- 51% of Talasol, involved in a project to build a photovoltaic power plant with a maximum capacity of 300 MW in the municipality of Talaván, Cáceres, Spain;
- Groen Gas Goor BV, Groen Gas Oude-Tonge BV and Groen Gas Gelderland BV, project companies operating anaerobic digestion plants in the Netherlands, with a green gas production capacity of approximately 3 million, 3.8 million and 9.5 million (with a license to produce 7.5 million) Nm3 per year, respectively;
- 83.333% of Ellomay Pumped Storage (2014) Ltd., which is involved in a project to build a 156 MW pumped storage hydropower plant in the Manara cliff, Israel.
For more information about Ellomay, visit http://www.ellomay.com.
Information relating to forward-looking statements
This press release contains forward-looking statements that involve substantial risks and uncertainties, including statements based on the current expectations and assumptions of the management of the Company. All statements, other than statements of historical fact, included in this press release concerning the plans and objectives of the Company, expectations and assumptions of management are forward-looking statements. The use of certain words, including the words “estimate”, “project”, “intend”, “expect”, “believe” and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company may not carry out any plans, intentions or expectations disclosed in the forward-looking statements and you should not place undue reliance on the forward-looking statements of the Company. Various important factors could cause actual results or events to differ materially from those which may be expressed or implied by the forward-looking statements of the Company, including all risks relating to projects under development and the impact of the Covid-19 pandemic on operations and projects, including in the context of measures taken by the authorities of the countries in which the Company operates, changes in the market price of electricity and demand, regulatory changes, changes in the supply and prices of resources necessary to operate the Company’s facilities (such as waste and natural gas) and in the price of oil, and technical and other disruptions in operations or the construction of power stations owned by the Company. These risks and uncertainties, as well as others associated with the business of the Company, are described in more detail in documents filed from time to time by the Company with the Securities and Exchange Commission, including its annual report on Form 20- F. Forward-looking statements are made as of this date and the Company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
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SOURCE Ellomay Capital Ltd.