Italy’s ERG to buy 75% in 317-MW wind, solar portfolio in US debut

Italian independent power producer ERG SpA (BIT:ERG) has signed an agreement to acquire a 75% stake in a 317-MW wind and solar farm portfolio in the United States, making its first move in the overseas renewables market.

The portfolio consists of the 224.4-MW Great Pathfinder Wind asset in Iowa and the 92.4-MW direct current Mulligan Solar in Illinois, both owned by US renewables developer Apex Clean Energy. Under the agreement, ERG will buy the majority interest from Apex for USD 270 million (EUR 244.9m).

Apex will hold the remaining 25% stake and continue to manage the operation of the facilities, ERG and Apex said on Thursday.

The Mulligan Solar plant initiated commercial operation in July 2022, followed by Great Pathfinder Wind in February 2023. Both farms are located in the Midcontinent Independent System Operator (MISO) market and earn revenues under long-term power purchase agreements (PPAs) with corporate entities.

Both assets will be debt-free at closing, which is expected within the first half of 2024. The transaction requires regulatory approvals from the US an European authorities, and the consent to the change of control from relevant third parties, including tax equity investors and PPA counterparts.

Following the existing transaction, ERG and Apex may consider the possibility of expanding their partnership.

Said Paolo Merli, CEO of ERG: “We proudly announce the entry of ERG in the US renewable market. A unique opportunity to continue growing our project portfolio, increasing geographical and technological diversification, with the acquisition of best-in-class operational assets and significant growth prospects through a cooperation agreement for about 1 GW under development. […] We expect to present our strategy and growth targets in the U.S. to the financial community in the first half of next year with the 2024-28 industrial plan. This strategic partnership concludes a 2023 of significant changes and exceptional growth for ERG, now a pure and more international renewable player”.

Added Ken Young, CEO of Apex: “Great Pathfinder and Mulligan represent the successful launch of our capital recycling program, intended to bring best-in-class renewable portfolios to market and enabling our team to advance more megawatts than ever before”.

(USD 1.0 = EUR 0.907)

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