Ellomay Capital Announces Additional Acquisition Under the Agreement With Ludan and Entry by Project Company into Loan Agreement
Ellomay Capital Ltd., an emerging operator in the renewable energy and energy infrastructure sector, recently announced the closing of its second investment in a Waste-to-Energy facility in The Netherlands pursuant to an agreement between Ellomay Luxemburg Holdings S.àr.l., the Company’s wholly-owned subsidiary (“Ellomay Luxemburg”) and Ludan Energy Overseas B.V. (“Ludan”) (an indirectly wholly-owned subsidiary of Ludan Engineering Co. Ltd. (TASE: LUDN)).
Ellomay Luxemburg was issued 51% of the outstanding shares of the project company, Groen Gas Oude-Tonge B.V. (“Oude Tonge”), which is in the process of developing an anaerobic digestion plant, with a green gas production capacity of approximately 475 Nm3/h, in Oude Tonge, the Netherlands (the “Oude Tonge Project”). Subject to certain conditions, including the availability and price of the feedstock required to operate the facility, Oude Tonge currently expects that the Oude Tonge Project will produce biogas for the Netherlands grid of approximately 3.8 million m3 per year and will produce annual revenues of approximately Euro 3.4 million, which will be derived mainly from the subsidies granted for the sale of biogas to the grid.
On May 3, 2017, Oude Tonge entered into a loan agreement with Coöperatieve Rabobank U.A. (“Rabobank”), whereby Rabobank agreed to provide the following financing tranches to Oude Tonge: (i) two loans with principal amounts of Euro 3.15 million and Euro 1.7 million, each with a fixed annual interest rate of 3.1% for the first five years, for a period of 12.25 years, repayable in equal monthly installments commencing three months following the connection of the Oude Tonge Project’s facility to the grid and (ii) an on-call credit facility of Euro 100,000 with variable interest. The Company expects that financial closing under the agreement with Rabobank will occur after registration of the securities required by Rabobank in connection with the loan.
The Oude Tonge Project executed an engineering, procurement and construction agreement with an affiliate of Ludan and is expected to enter into an operation and maintenance agreement with an affiliate of Ludan, both based on terms already agreed to by us and Ludan. It is estimated that the duration of the construction of the Oude Tonge Project shall be approximately one year and the expected overall capital expenditure in connection with the Oude Tonge Project are approximately Euro 8.5 million (approximately $9.3 million), including the financing mentioned above.
With respect to the first project executed with Ludan located in Goor, the Netherlands, the relevant project company currently expects that, subject to certain conditions, including the availability and price of the feedstock required to operate the facility, the project will produce approximately 3 million m3 biogas for the gas grid and approximately 5,600 MWh for the electricity grid per year and will produce annual revenues of approximately Euro 3.5 million, which will be derived mainly from subsidies received for the sale of biogas and electricity to the grid.
Ran Fridrich, CEO and director of Ellomay, commented: “The execution of the loan agreement of the Oude Tonge Project is an important milestone for Ellomay, and the joint venture with our partners, Ludan Engineering. After closing the first joint venture project in Goor last December, which is now under construction, we are proud to reach another project finance agreement with the Oude Tonge project. We aim to act fast in Dutch biogas market, in order to maximize its potential before it becomes mature. The Dutch renewable energy market is expected to grow rapidly over the next years and Ellomay aims to become part of its success.”