Prime Energy Expands Solar Portfolio in Hungary with 70 MW Acquisition

Prime Energy has signed a memorandum of understanding to acquire operating solar facilities connected to the power grid with a capacity of approximately 70 megawatts across four sites in Hungary, including ownership of the underlying land.

The transaction is expected to yield a project return of about 12.2% and an equity return of about 18.8%, even before realizing the upgrading potential through energy storage systems. Integrating standalone energy storage systems into the acquired facilities is expected to serve as an additional growth engine, yielding a project return of about 38% and an equity return of about 87%. All electricity produced at the facilities is sold under a long-term government tariff regulation, with an average remaining period of about 17.2 years, at a tariff of about 0.44 HUF per kWh, linked to the Hungarian consumer price index.

Financing and Transaction Structure

The company stated that the acquisition will be financed through bank financing of approximately 75% of the transaction consideration, under Non-Recourse terms and for a period of 15 years. The expected equity for the acquisition stands at approximately 17.8 million euros, before transaction expenses.

The transaction is planned to be executed on a Debt Free / Cash Free basis. Upon completion, the company will hold full rights in the project companies, including owner loans, free of financial debt to external parties. According to Prime Energy's estimates, by the end of 2027 the company expects to connect 666 MW and about 4.7 GWh of storage capacity, with a revenue run rate of about 426 million shekels and a project EBITDA of about 252 million shekels.

Management Commentary and Market Performance

Yaron Kikoos, Vice Chairman of the Board of Directors and Chief Business Officer, stated:

The acquisition in Hungary represents a significant leap forward in our operations in the country, where we currently hold solar facilities with an installed capacity of about 15.85 MWp, generating annual revenues of about 2.4 million euros and an EBITDA of about 2.1 million euros, to which we also expect to connect storage facilities. The addition of the acquired portfolio is expected to significantly expand our income-generating assets, while utilizing existing presence and infrastructure to create economies of scale, operational synergies, efficiency in operations and maintenance, and improved profitability.

Alongside this business move, the company's stock has shown a decline of 12.30% over the past week. Over the past month, the stock dropped by 23.30%, while over the past three months a decrease of 29.49% was recorded. Last July, it was reported that Prime Energy signed a binding agreement with Delek Assets to establish storage facilities and server farms at about 60 gas stations across Israel. According to its estimates, the potential across about 60 Delek refueling complexes stands at about 150 megawatts.