Press Release

Ellomay Capital announces its entry into the Israeli photovoltaic market

Ellomay Capital Ltd. announced the execution of an agreement to acquire 100% of the equity of an Israeli company that owns a photovoltaic site with fixed technology and a nominal capacity of approximately 9 MWp in Talmei Yosef, Israel.
Emiliano Bellini

The Talmei Yosef Project is owned by an Israeli company (Sun Team Talmei Yosef Ltd.), which is wholly-owned by another Israeli company (Sun Team Ltd.), which, in turn, is wholly-owned by another Israeli company (Sun Team Group Ltd.). The Agreement provides that the Company will acquire 100% of the equity of Sun Team Group Ltd., subject to certain conditions precedent, in consideration for an aggregate amount of NIS 39 million (approximately $11 million) (the “Purchase Price“). The Purchase Price is subject to certain adjustments as set forth in the Agreement based on cash reserves in reference to November 1, 2016.

The Talmei Yosef Project holds a permanent electricity production license for a period of 20 years commencing November 11, 2013. The tariff currently applicable to the Talmei Yosef Project is NIS 0.9857 (approximately $0.278) per kWh. In April 5, 2012, the Israeli project company entered into a long-term (20 years commencing November 11, 2013) standard power purchase agreement with the Israeli Electric Company (the “IEC“), to which it provides all of the energy produced by the Talmei Yosef Project. The electricity tariff paid by the IEC is guaranteed for a period of 20 years commencing November 11, 2013 and is updated once a year based on changes to the Israeli Consumer Price Index. It is expected that the annual payments received from the IEC in connection with the Talmei Yosef Project will be approximately NIS 16 million (approximately $4.5 million).

The Talmei Yosef Project is approximately 80% financed by an Israeli consortium led by Israel Discount Bank.

The consummation of the acquisition contemplated by the Agreement is subject to several customary conditions precedent, including the approval of various regulatory authorities (including the Israeli Public Utilities Authority – Electricity, the Israeli Minister of National Infrastructures, Energy and Water Resources), the approval of the financing bank and the approval of the Seller’s board of directors and shareholders. We believe the Agreement will be consummated during the third quarter of 2017 but there is no assurance as to whether and when the conditions precedent will be satisfied.

Ran Fridrich, CEO and a board member of Ellomay commented: “The agreement to acquire the Talmei Yosef Project again presents Ellomay’s ability to efficiently enter into varied business transactions in accordance with the Company’s strategy. This project is a revenue-producing Israeli PV project connected to the grid that enhances our operating PV portfolio and we see business potential in it. We expect to continue investing in additional yielding assets in parallel to the development of new projects, thereby diversifying our operations and portfolio.”