The Company announces that today it agreed to acquire 100% of shares in ENERGO-PRO Hydro Development, s.r.o. (“EP Hydro Development”) from the Company’s sole shareholder, DK Holding Investments s.r.o. (“DKHI”). EP Hydro Development holds 100% of indirect ownership rights over the Alpaslan 2 dam and hydropower plant (“Alpaslan 2”).
Alpaslan 2 is situated on the Murat River in Turkey and has total installed capacity of 280 MW. The transaction is expected to close on or around 8 January 2024. The purchase price is EUR 476.0 million and will be settled on a non-cash basis by a set-off against the corresponding amount of the Company’s receivables against DKHI, which arose as a result of distributions in prior periods. To assist in determining the fair market value of EP Hydro Development, the Company engaged PricewaterhouseCoopers Česká republika, s.r.o. to produce an independent valuation report.
Petr Milev, Chief Executive Officer, commented:
“This transaction represents an important step in the execution of our strategy. Alpaslan 2 is a large hydropower asset constructed and successfully operated by our parent company DKHI, which benefits from US dollar-denominated Feed-in-Tariffs on all of its production as well as the ability to optimize profitability by offering ancillary services. Bringing it into the ENERGO-PRO group will increase our green electricity generation volume, revenues and EBITDA. It will also provide a natural hedge by contributing to our company a highly complementary combination of US dollar-linked cashflows and EUR-denominated debt. Over time, thanks to its expected EBITDA generation and the amortizing profile of its debt, we expect this asset to have a positive impact on our net leverage as well. Importantly, the transaction is settled by way of a set-off and involves no cash consideration paid. Last but not least, Alpaslan 2 is the first project that the Group developed, constructed and has been operating in compliance with the International Finance Corporation (IFC) Performance Standards.”
About Alpaslan 2:
Alpaslan 2 is owned by Murat Nehri Enerji Üretim A.S. (“Murat Nehri”), which is wholly owned by EP Hydro Development (transaction perimeter). The investment of EP Hydro Development in Murat Nehri benefits from insurance coverage provided by the Czech state-owned Export Guarantee Insurance Corporation (Exportní garanční a pojišťovací společnost, a.s., “EGAP”) (political risk insurance).
Alpaslan 2 is situated on the Murat River in Mus province of the Eastern Anatolian region in Turkey. Murat Nehri holds a generation license in relation to Alpaslan 2 which is valid until 6 September 2059.
Alpaslan 2 is located approx. 25 km downstream from Alpaslan 1 HPP, which is owned and operated by the state-owned generation company Elektrik Üretim A.Ş.
Alpaslan 2 was developed, constructed and has been operated by DKHI. Alpaslan 2 includes a rockfill dam with a central asphalt core with a height of 104 m and a crest length of 829 m (excluding spillway bridge). A 1,191 m long spillway with five gated bays of 11 m width each (including chute channel, stilling basin and discharge canal) is constructed to provide a safe discharge of floods. The reservoir has a surface area of approx. 50 sq. km with a gross storage of approx. 2.1 bn cubic meters and active volume of approx. 1.1 bn cubic meters.
The construction of the dam body was completed in August 2020 and a provisional acceptance certificate from the General Directorate of State Hydraulic Works (Devlet Su İşleri Genel Müdürlüğü) was issued in respect of the dam body on 21 October 2020.
