New Spanish renewables gain traction as Luxcara buys solar site

The German fund manager has bought its first project in Spain, hailing the ‘free market conditions’ after sealing the 45MW subsidy-free asset.

German renewables fund manager Luxcara has made its first acquisition in Spain with the purchase of a 45MW capacity subsidy-free solar project.

The El Salobral site is yet to be built, with completion and connection to the grid planned for the second part of 2018. It is in Spain’s southern region of Andalusia.

The project will be added to Luxcara’s Flaveo Infrastructure Europe SCS SICAV-FIS Solar and Wind fund, which it launched in 2015 and now has a portfolio capacity of about 400MW. Previous investments have been limited to assets in Norway, Germany and the UK. The fund’s current size is €280 million and a closing of €320 million is anticipated at the end of this quarter.

El Salobral is the result of the 8GW procured by the Spanish government in subsidy-free auctions last year, following several years of moratoriums on renewables growth. Luxcara is the latest fund manager to take advantage of the belated growth, with France-based Mirova investing in a 300MW wind portfolio earlier this month. As with several of its other sites, Luxcara plans to ink a power-purchase agreement for El Salobral.

“We are very happy to realise a solar project in Spain under free-market conditions,” said Alexandra von Bernstorff, Luxcara managing partner. “El Salobral allows us to invest in a solar market with one of the strongest growth potentials in Europe.”

The Spanish renewables market’s growth was stunted following a series of measures in 2007, 2012 and 2013, retroactively cutting subsidies to solar and wind projects. UK-based fund manager EISER Infrastructure became the first of 27 investors last year to receive a compensation pay-out from the government, after it was awarded €128 million by the World Bank’s International Centre for Settlement of Investment Disputes.

Luxcara’s current fund is the third of its kind and the firm operates about 1GW of European solar and wind assets across its vehicles, with an investment volume of nearly €2.3 billion.