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Prime Energy Buys Hungarian Solar Projects for 68 Million Euros
Prime Energy has signed a memorandum of understanding to acquire four operational, grid-connected solar facilities in Hungary for approximately 68 million euros (about $74 million). The deal covers a total capacity of 70 megawatts across four sites, including ownership of the land they occupy. The acquisition is part of the company's broader strategy to expand its renewable energy platform across four European markets.
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What happened
- 01Prime Energy signed a memorandum of understanding to acquire 70 megawatts of operational solar facilities in Hungary for approximately 68 million euros.
- 02The acquisition includes four grid-connected sites and their land, which are free of external financial debt.
- 03Electricity from the sites is sold under government tariff agreements with an average of 17.2 years remaining at about 44 agorot per kilowatt-hour.
- 04Prime Energy plans to integrate battery storage systems, projecting project returns could rise from 12.2% to 38% and equity returns from 18.8% to 87%.
- 05The deal will be funded with 75% bank debt over 15 years, requiring an equity contribution of approximately 17.8 million euros.
- 06According to Ice, the acquisition comes amid a sharp decline in Prime Energy's stock, which fell over 23% in the last month.
- 07Prime Energy aims to connect 666 megawatts of generation and 4.7 gigawatt-hours of storage across four European markets by the end of 2027.
- 08In Israel, Prime Energy is currently developing energy storage facilities at 60 gas stations.
The electricity generated by these Hungarian facilities is sold under long-term government tariff agreements, which have an average remaining period of 17.2 years. The tariff is set at approximately 44 agorot per kilowatt-hour and is indexed to Hungary's consumer price index. Prime Energy plans to integrate battery energy storage systems at the sites, which it projects will significantly boost returns.
Without storage, the company estimates the acquisition will yield a project-level internal rate of return of 12.2% and an equity return of 18.8%. With storage integrated, those projections rise to a 38% project return and an 87% equity return. The transaction is structured on a debt-free and cash-free basis, and Prime Energy plans to fund it using 75% bank financing over 15 years, requiring an equity contribution of about 17.8 million euros.
This expansion comes as Prime Energy's stock has experienced a sharp decline of over 20% in the past month, according to Ice. Beyond its European plans, which target connecting 666 megawatts of facilities and 4.7 gigawatt-hours of storage by the end of 2027, the company is also developing storage facilities at 60 Israeli gas stations.
Summarized by baba from the reports of 3 newsrooms. Updated
Latest report: TheMarker. Read TheMarker’s originalThe coverage
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