Prime Energy Expands in Europe With $74 Million Hungarian Solar Deal
Translated & summarized from Bizportal by baba
Prime Energy has agreed to acquire operational solar facilities in Hungary for approximately 68 million euros, adding 70 MW of capacity. The company plans to integrate battery storage systems at the sites, expecting significant returns from both solar generation and storage. The acquisition, financed mostly by bank debt, is part of Prime Energy's broader European expansion strategy into renewable energy markets. The company aims to connect 666 MW of facilities and 4.7 GWh of storage by the end of 2027.
The story in 6 lines · by baba
- Prime Energy will acquire 70 MW of operational solar facilities in Hungary for approximately 68 million euros.
- The deal includes long-term government tariff agreements for electricity sales with an average of 17.2 years remaining.
- Prime Energy plans to integrate battery storage systems, projecting high internal rates of return for both solar and storage operations.
- The acquisition is expected to be financed with 75% bank debt, requiring about 17.8 million euros in equity from Prime Energy.
- This expansion is part of Prime Energy's strategy to grow its renewable energy platform across four European markets.
- The company aims to connect 666 MW of facilities and 4.7 GWh of storage capacity by the end of 2027.
Prime Energy has signed a memorandum of understanding to acquire solar facilities in Hungary for approximately 68 million euros (about $74 million). The deal includes four operational solar sites connected to the grid, with a total capacity of 70 megawatts (MW) AC, along with the land they occupy. All electricity generated is sold under long-term government tariff agreements, with an average remaining period of 17.2 years and a tariff of about 44 agorot per kilowatt-hour, indexed to Hungary's consumer price index.
The company estimates the acquisition will yield an internal rate of return (IRR) of 12.2% at the project level and 18.8% on equity, based on current solar operations. Prime Energy plans to integrate battery energy storage systems (BESS) at these sites, which it projects could generate an IRR of 38% at the project level and 87% on equity, separate from the solar generation returns.
The acquisition is expected to be financed with about 75% bank debt over 15 years, with repayment based on the project companies and their assets. Prime Energy anticipates requiring approximately 17.8 million euros in equity, excluding transaction costs. The deal assumes the target companies have no external debt or cash. Upon completion, Prime Energy will hold full rights to the project companies, including owner loans.
Prime Energy already operates 15.85 MW of solar facilities in Hungary, generating annual revenues of about 2.4 million euros and earnings before interest, taxes, depreciation, and amortization (EBITDA) of 2.1 million euros. It also plans to add storage systems to these existing facilities.
Yaron Kikoiz, Deputy Chairman of the Board and Chief Business Officer, stated that the company is accelerating its European growth strategy across Hungary, Romania, Portugal, and Germany. He added that the acquired portfolio will significantly expand their income-generating assets, leveraging existing infrastructure for economies of scale, operational synergies, and improved profitability. Kikoiz also highlighted the significant potential of BESS to broaden revenue streams and capitalize on European electricity market opportunities.
Prime Energy's project pipeline, from development to operation, includes 1.2 gigawatts (GW) of solar facilities and 9.7 GW hours of potential storage capacity in Israel and other markets. The company forecasts connecting 666 MW of facilities and 4.7 GW hours of storage by the end of 2027, projecting revenues of about 426 million shekels and project EBITDA of 252 million shekels.
