A continuously changing solar energy market has an effect on energy finance, often spurring new financial products and innovations. The latest development by Photon Energy Investments can be classified as one of them.
The company, which is a division of the Amsterdam-headquartered Photon Energy, launched a new financial vehicle last week, the European Solar Holdings NV (ESH) – an EU-wide Solar Asset Aggregation Yield-Co that the company claims to be the strongest possible investment protection currently available.
The key idea is that the aggregation of the largest possible volume of solar PV assets under the strongest Bilateral Investment Treaties (BIT) with a safe non-EU country will offer EU solar power investors access to a defence platform.
BITs are bilateral treaties between two countries to protect investors from one country when investing in another country. They should supposedly protect investors against retroactive measures in other countries too. They are the basis for bringing international arbitration lawsuits against countries (such as the lawsuit of the group of PV investors IPVIC brought against the Czech Republic). However, "the trouble is that the EU wants to abolish these BITs between EU member states and replace them with one, joint treaty. And that treaty will most likely be much weaker than the single BITs," Jan Krcmar, communications director at Photon Energy, told pv magazine.
Referring to the retroactive taxes and the regulatory changes aimed at solar PV investors across the EU (e.g. Spain, Czech Republic, Bulgaria and Greece), Georg Hotar, CEO of Photon Energy, used harsh words: "with no real recourse to national courts, a cynically unhelpful EU Commission and the toothless Energy Charter Treaty, investors have become free-for-all sitting ducks.
"The most recent final dismantling of the support mechanism in Spain and the consequential slaughter of equity investors and financing banks serves as the most relevant real-life example of things to come," Hotar added, saying that the risk of retroactive taxes and regulatory measures applies now to all jurisdictions in the EU, including Germany, France and the U.K.
ESH intends to establish itself as the preferred vehicle for yield-seeking investors into renewable energy assets in the European Union (EU) by combining effective investment protection and efficient asset management with a liquid public listing and an attractive dividend yield. ESH furthermore aims to go public via an IPO offering on a major European exchange in 2015.
So Photon Energy Investments calls investors with operating PV power assets in the EU to swap their investments for shares in ESH. The price of the shares is too early to say, Krcmar told pv magazine. Photon Energy Investments, Krcmar added, is "currently negotiating with first interested investors. The share price will reflect the MWp accumulated. Investors will be able to swap their power plants for a share in ESH, i.e. you get an amount of shares equal to the MWp."
Photon Energy Investments will contribute to ESH its 26 MWp of grid-connected PV power plants in the Czech Republic, Slovakia and Italy. Its target portfolio size for the IPO is 250 MWp and the long-term objective is to aggregate a 1 GWp portfolio by 2017.
Through the PV assets aggregation ESH furthermore aims to offer solar investors optimal asset performance, efficient project debt financing and dividends.