Project Developer is planning to build a power plant producing electricity and heat in the South-East of Hungary that has an authorized capacity of 50 MWel and could reach a capacity of 67 MWel.
Developer has exclusive access and all the needed licenses to exploit the largest geothermal reservoir in Hungary.

Capital structure:
Total Investment Cost EUR 224mn, of which €18mn already invested by Project Developer.
- 25% will be financed with Equity (€ 51.5 ml - including EU Capital Contributions)
- 75% with Debt
- Proposed Transaction is to raise EUR 25mn

Investment Rationale
Attractive regulatory framework:
• Feed-in-Tariffs granted by the Hungarian Government
• New finance for Hungarian renewable energy production (EU plan 2014-2020 provides funds for 8,3 billion euros)
• New concession law 2013 includes geothermal, oil, gas and shale development
Favorable geographic location:
• Earth's crust thinner than average (~25 km) due to sub-crustal erosion
• Geothermal gradient higher than the world average
• Largest geothermal energy potential of low and medium-enthalpy in Europe
• Presence of high-enthalpy resources, not exploited yet
Attractive competitive environment:
• Currently zero-competition on the electricity production segment
• New projects are carried on by major local utilities
• Hungarian Government is supporting energy projects for reducing the dependency from energy imports
• Republic of Hungary issue the National Renewable Energy Action Plan 2010-2020: Geothermal Energy new installed power expected 57MW electricity (Action Plan page 201)
Experienced Management & Technical Partners:
• The management has developed a strong know-how in the renewable energy sector (photovoltaic 30 MW, Biogas 3 MW)

mn EUR Revenue EBITDA
2015 11.6 10.9
2016 39.8 33.6
2017 40.6 34.2
2018 41.4 34.9

Project IRR is min 14%

Posted Dec 2, 2014

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