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Proposed Acquisition of Spanish Concentrating Solar Power Portfolio

27 February 2018 | London | Author: ContourGlobal plc

ContourGlobal plc (the "Company" and, together with its subsidiaries, "ContourGlobal") today announces that it has reached agreement with Acciona Energía, S.A.U. ("Acciona Energía") regarding the acquisition of Acciona Energía's 250 MW portfolio of five 50 MW Concentrating Solar Power ("CSP") plants in South-West Spain (the "Acciona Termosolar Group") (the "Proposed Acquisition").  





  • Total Enterprise Value of €962 million, including the consideration payable to Acciona Energía of approximately €806 million and Existing Net Debt (including adjustment for working capital) of €156 million.  ContourGlobal has also agreed to make earn-out payments to Acciona Energía of up to €27 million(1)
  • Acquisition combines ContourGlobal's solar and Spanish thermal operating expertise into a sizable portfolio of assets enabling synergies with existing European operations
  • For the year ended 31 December 2017, the Acciona Termosolar Group generated Adjusted EBITDA of €110 million (unaudited) and ContourGlobal expects to create meaningful margin expansion post-acquisition
  • Acciona Termosolar Group is a regulated wholesale power generation business with limited price and volume risk
  • The Proposed Acquisition is expected to be accretive to earnings
  • The Proposed Acquisition will further strengthen the Company's renewable position in Europe and is expected to extend the average remaining contract life for ContourGlobal's portfolio from 11 to 12 years as of 31 December 2017
  • ContourGlobal will finance the Proposed Acquisition through a combination of project financing of approximately €635 million  and cash on the balance sheet
  • The Proposed Acquisition is classified under the Listing Rules as a Class 1 transaction and therefore is conditional, amongst other things, on the approval of ContourGlobal's shareholders
  • The Company and Acciona Energía have secured an irrevocable undertaking from ContourGlobal L.P., who as at 27 February 2018, owns approximately 71 per cent of the ordinary share capital of the Company
  • Subject to shareholder and regulatory approvals, completion is expected in the second quarter of 2018



Joseph C. Brandt, President and Chief Executive Officer of ContourGlobal, said:

"Over the past seven years we have enjoyed successful thermal operations in Spain and developed a solar business in Central and Southern Europe. Today's acquisition enables us to combine this operating expertise in a sizable portfolio of long-term regulated assets which will enable us to leverage our existing footprint in the country and deliver on our commitment to pursue operationally led significant growth on our path to double run-rate Adjusted EBITDA without new equity in five years."



ContourGlobal has a differentiated business model, with a proven growth track record focused exclusively on long-term wholesale contracted power generation across different technologies, geographies and stages of development. The combination of strong operational performance, a flexible and agile corporate strategy and an efficient capital structure has enabled ContourGlobal to deliver operationally led attractive growth.

The Proposed Acquisition falls into one of ContourGlobal's core M&A strategies, as outlined at the time of the IPO, of investing in regulated assets with operating synergies.

The Acciona Termosolar Group contains very limited wholesale price and resource exposure, with approximately 70% of the revenue regulated. The five CSP plants are regulated under the Spanish renewable remuneration scheme (Royal Decree-Law (RDL) 9/2013) and are entitled to receive investment and operation remuneration for 25 years from the start of operations, in addition to electricity pool revenues, to achieve a determined target return on investment over the regulatory life of the plants. The regulatory rate of return is currently set at 7.4% pre-tax until 2019. As a result, the Proposed Acquisition will bring regulated revenues in Euros to ContourGlobal and therefore is consistent with ContourGlobal's growth strategy.

The Proposed Acquisition will further strengthen ContourGlobal's renewable footprint in Europe. The Proposed Acquisition is also expected to extend the average remaining contract life for ContourGlobal's portfolio 11 to 12 years as of 31 December 2017.



The Proposed Acquisition represents an opportunity for ContourGlobal to earn returns in excess of ContourGlobal's internal hurdle rates. It is also expected to be accretive to earnings. As of the date of this announcement, the Company expects the Acciona Termosolar Group to generate approximately $130 million in Adjusted EBITDA in the first full year post acquisition. As a result, the Proposed Acquisition represents a material first step in ContourGlobal achieving the objective set out at the time of the IPO to at least double run-rate Adjusted EBITDA between 31 December 2017 and the end of 2022 without requiring new equity.

The Proposed Acquisition will be financed through a combination of a project financing of €635 million underwritten by Goldman Sachs at an all-in rate of approximaterly 3.9% and the existing cash resources of ContourGlobal. The Company expects its consolidated net debt/EBITDA ratio to remain at constant foreign exchange rates within 4.0x - 4.5x range as at 31 December 2018, in line with the stated leverage guidance at IPO.

Following completion of the Proposed Acquisition and on the basis of the Directors' projections for ContourGlobal's Adjusted EBITDA for the year ended 31 December 2017 and unaudited Adjusted EBITDA for the Acciona Termosolar Group for the same period, European plants will account for 59% of the ContourGlobal's Adjusted EBITDA and 62% of the ContourGlobal's Adjusted EBITDA will be derived in Euros compared with 49% and 53%, respectively, pre-Acquisition. On the same basis, ContourGlobal's exposure to solar energy will increase and is projected to account for 23% of ContourGlobal's Adjusted EBITDA following completion of the Proposed Acquisition as compared to currently 6%.



Acciona Energía installed its first CSP facility in the Nevada Desert in the US in 2007. Since then, it has installed (and currently owns) five 50 MW CSP plants, all of them in South-West Spain, benefitting from excellent solar radiation and with a total capacity of 250 MW.

The Acciona Termosolar Group comprises five 50 MW CSP plants in South-West Spain (together, the "CSP Plants") which are located in: Alvarado (the "Alvarado Plant"), Majadas (the "Majadas Plant"), Orellana in Extremadura (the "Orellana Plant") and Palma del Rio (the "Plama I Plant") and (the "Palma II Plant"). The CSP Plants offer a highly attractive Euro-denominated return with an average remaining regulated lifetime of 18 years. All CSP Plants are regulated under the Spanish renewable remuneration scheme, guaranteeing long-term stable and regulated cash-flows.

The five CSP Plants were developed and commissioned between 2009 and 2012 with parabolic trough technology using leading suppliers and developers (including General Electric and Siemens). The Alvarado Plant was the first parabolic trough plant to be established in Spain. The Acciona Termosolar Group's portfolio has undergone improvements and, as a consequence, production losses decreased from 6.2% in 2015 to 3.0% in 2017. Together, the plants produce clean energy equivalent to the electricity demand of around 161,000 homes. Acciona Termosolar is currently providing full-service operation and maintenance services in all the plants with in-house personnel (approximately 140 total full-time employees). The chart below provides additional information on the CSP Plants:







Palma I

Palma II


Capacity (in MW)







Commercial operation date









General Electric


General Electric

General Electric


2017 annual production (in MWh)








The new regulatory regime in Spain guarantees remuneration for 25 years for CSP assets from the start of operations. The scheme is based on investment and operation remuneration in addition to production sold in the market at regulatory pool prices within a floor and cap system. The investment and operation incentives are calculated such that a standard plant would earn a "reasonable rate of return". For the first statutory period, ending in 2019, this "reasonable rate of return" has been set at 7.4% pre-tax based on the 10-year Spanish government bond plus 3%. As a result, approximately 70% of the Acciona Termosolar Group's revenues are not exposed to volumes or power price risk.

For the year ended 31 December 2017, the Acciona Termosolar Group generated revenues of €147 million (unaudited) (2016: €141 million; 2015: €148 million), and Adjusted EBITDA of €110 million (unaudited) (2016: €102 million; 2015: €112 million). In the same period, the Acciona Termosolar Group generated a profit before tax of €26 million for the year ended 31 December 2017 (audited) (2016: loss of €(67) million(2) ; 2015: profit of €14 million). As at 31 December 2017, the portfolio had total assets of €1,196 million (unaudited).



ContourGlobal's operating platform in Arrubal will enable it to efficiently integrate these new facilities into the existing European renewable business.

On a short-term horizon, ContourGlobal will implement its standards, most importantly on health and safety, operations, financial reporting and compliance. The integration will be supported by a dedicated project management team acting as a competence centre supporting construction, development and M&A projects.



On 27 February 2018, a share purchase agreement (the "Share Purchase Agreement") was entered into between ContourGlobal Mirror 2 S.à r.l. (the "Buyer"), a wholly-owned subsidiary of the Company, as purchaser, ContourGlobal Terra Holding S.à r.l., as guarantor, and the Company, and Acciona Energía, as seller, whereby the purchaser will acquire 100% of the share capital of Acciona Termosolar S.A.U., the holding company of the Acciona Termosolar Group.

The consideration payable to Acciona Energía in respect of the Proposed Acquisition is approximately €806 million, to be paid in cash on closing. As part of the Proposed Acquisition, a "locked box" mechanism has been agreed for the period from 31 December 2017 to completion of the Acquisition.

In addition, ContourGlobal has agreed to assume approximately €156 million of the existing net debt in the Acciona Termosolar Group (as of 31 December 2017). The Buyer has also agreed to pay earn-out payments to Acciona Energía of up to €27 million.

Completion of the Proposed Acquisition is expected to occur in the second quarter of 2018 and is conditional, inter alia, upon approval from the Spanish antitrust authority and the approval of the Company's shareholders.

The Company has agreed to pay a break fee equal to approximately but no more than 1 per cent. of the market capitalisation of the Company at the time of entry into the Share Purchase Agreement if shareholder approval for the Proposed Acquisition is not secured by 30 June 2018 (or such later date as agreed between the parties). 

Full details of the terms of the Share Purchase Agreement will be set out in the Circular to approve the proposed transaction, to be published in due course.



ContourGlobal L.P., the Company's majority shareholder holding, as at 27 February 2018, approximately 71 per cent. of the ordinary share capital has provided an irrevocable undertaking to vote in favour of the resolution to approve the Proposed Acquisition and has agreed to pay a financial penalty if shareholder approval is not secured by 30 June 2018 (or such later date as agreed between the parties to the Share Purchase Agreement).



Presentation and conference call

The Company will host a call for investors at 3pm (UK). Confirmation code and participant access numbers per country are available on the ContourGlobal website:

The presentation for the call can be downloaded at



Investor Relations - ContourGlobal

Alice Heathcote

Tel: +1 646 386 9901


Media - Brunswick

Charles Pretzlik/Simon Maine

Tel:  +44 (0) 207 404 5959


Notes to text:

1. Earn-outs are based on the level of regulated return for the six-year period commencing 1 January 2020 and on the level of production for the period from 1 January 2018 to 31 December 2020.

2. Includes a one-off cost of €77 million in relation to an early repayment of financial liabilities and associated derivatives.      


Important Notice

This announcement has been issued by and is the sole responsibility of the Company. The information contained in this announcement is for background purposes only and does not purport to be full or complete. The information in this announcement is subject to change without notice.Subject to the UK Listing Rules, the UK Disclosure Guidance and Transparency Rules and the Market Abuse Regulation (EU) No. 596/2014, the issue of this announcement shall not, under any circumstances, create any implication that there has been no change in the affairs of ContourGlobal or the Acciona Termosolar Group since the date of this announcement or that the information in this announcement is correct as at any time subsequent to the date of this announcement.


Certain information contained in this announcement, including any information as to ContourGlobal's or the Acciona Termosolar Group's strategy, plans or future financial or operating performance constitutes "forward-looking statements". These forward-looking statements can be identified by the use of terminology such as, "aims", "anticipates", "assumes", "believes", "budgets", "could", "contemplates", "continues", "estimates", "expects", "intends", "may", "plans", "predicts", "projects", "schedules", "seeks", "shall", "should", "targets", "would", "will" or, in each case, their negative or other variations or comparable terminology. Forward-looking statements appear in a number of places throughout this announcement and include, but are not limited to, express or implied statements relating to ContourGlobal's business strategy and outlook; ContourGlobal's and the Acciona Termosolar Group's future results of operations; ContourGlobal's and the Acciona Termosolar Group's future financial and market positions; expectations as to future growth; general economic trends and other trends in the industry in which ContourGlobal and the Acciona Termosolar Group operates; the impact of regulations on ContourGlobal and its operations; and the competitive environment in which ContourGlobal and the Acciona Termosolar Group operates.


By their nature, forward-looking statements are based upon a number of estimates and assumptions that, whilst considered reasonable by the Directors and the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those indicated, expressed or implied in such forward-looking statements. Forward-looking statements are not guarantees of future performance. Any forward-looking statements in this announcement reflect the Directors' and the Company's current view with respect to future events and are subject to certain risks relating to future events and other risks, uncertainties and assumptions. The forward-looking statements contained in this announcement speak only as at the date of this announcement. The Directors and the Company disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in their expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, the UK Prospectus Rules, the UK Listing Rules, the UK Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and the Market Abuse Regulation (EU) No. 596/2014 . You are cautioned against placing undue reliance on any forward-looking statement in this announcement.


A copy of the Circular when published will be available from the registered office of the Company and on the Company's website at Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.