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CMS advises Encavis on signing a long-term PPA and the financing for a subsidy-free 300 MW solar park in Spain

29 November 2019

International law firm CMS has advised Encavis on signing a long-term power purchase agreement (PPA) and on the financing for a Spanish solar park. The ten-year PPA was concluded with a leading international utility company. The solar park is being implemented without state subsidies. With a planned generation capacity of around 300 megawatts, the plant is one of the largest solar parks in Europe. The facility is located near the Spanish city of Talayuela.

The ability offered by PPAs to realise solar parks via project finance and without state subsidies is a relatively new phenomenon in Europe. It is widely regarded as a key step towards market viability for renewable energy. The electricity price is determined by supply and demand, rather than by regulation. This requires the price to be fixed for a long period in order to gain access to project finance.

CMS mobilised a cross-jurisdictional team comprising teams across the UK, Germany, and Spain. The international CMS team headed by partners Niklas Ganssauge and Marc Riede advised Encavis AG on all aspects of the PPA and project finance, with the UK team, led by CMS’ Head of Energy Munir Hassan and supported by Dalia Majumder-Russell, Freddie May, Jason Harding and Kirsty Templar, largely focusing on the PPA workstream. CMS previously advised Encavis on the acquisition of the project company.

Encavis AG acquires and operates solar plants and wind farms in Europe and is one of the leading independent players in the sector. The Hamburg-based company employs around 120 people and has a total generation portfolio of more than 1.9 gigawatts. Encavis AG posted sales of EUR 248.8 million in 2018. The company’s shares are listed on the SDAX of Deutsche Börse.