Solair Enters Australian Renewable Energy Market with Major Solar-Storage Deal
Israeli renewable energy firm Solair has signed an MOU to acquire up to 70% of a 200 MW solar and 550 MWh storage portfolio in Australia, with an estimated EV of 780 million Australian dollars.
The Israeli renewable energy company Solair Renewables is expanding into Australia. Solair announced on Tuesday that it has signed a memorandum of understanding (MOU), subject to a binding agreement, with a leading global renewable energy developer to acquire up to 70% (and no less than 49%) of a portfolio of solar and energy storage projects in Australia.
This transaction marks Solair's entry into the Australian market, where the company sees significant potential for expanding operations. Australia boasts a top-tier sovereign credit rating (AAA) and some of the highest renewable energy targets globally, aiming for approximately 40 GW of additional capacity by 2030.
According to the MOU, the Australian portfolio includes about 200 megawatts (MW) of solar capacity alongside integrated photovoltaic storage facilities with a total storage capacity of approximately 550 megawatt-hours (MWh). The transaction is expected to be completed by the end of the year, with the solar portfolio acquired in an operational and connected state, while the storage portfolio will be added in accordance with predefined milestones.
Part of the photovoltaic capacity benefits from power purchase agreements (PPAs) with Investment Grade companies, and part of the storage portfolio similarly enjoys such commercial agreements, with commercial talks ongoing for the remainder. Solair intends to execute the acquisition jointly with an Israeli institutional investor as a co-investment, or alternatively to carry out the purchase independently.
The estimated equity value of the portfolio, based on 100% ownership after completion of construction, stands at approximately 300 million Australian dollars (around 650 million shekels), with the purchase price proportional to the acquired stake.
Consideration will be paid according to milestones. Upon closing, the full payment for the photovoltaic portfolio will be remitted (approximately 100 million Australian dollars for a roughly 49% stake), while the remaining consideration for the storage portfolio will be paid subject to financial closings for each relevant storage component. The final consideration will be subject to adjustments set out in the MOU, inter alia regarding the final ownership stake, net debt, and financing terms.
The enterprise value (EV) of the portfolio is estimated at approximately 780 million Australian dollars (about 1.7 billion shekels). In a representative operating year (based on 100% ownership), the projects are expected to generate revenues of about 110 million Australian dollars, an EBITDA of roughly 82 million Australian dollars, and an FFO of approximately 65 million Australian dollars.
Strategic Vision and Global Expansion
Alon Segev, CEO of Solair, stated: "This transaction represents a strategic entry for us into the Australian renewable energy market, in partnership with a leading global infrastructure company. These are high-quality assets combining solar energy and storage, partly backed by power purchase agreements with strong corporate clients. This deal aligns with the company's strategy to generate double-digit returns on equity, and we view it as a foundation for expanding cooperation with our partner on additional projects in Australia, a large and developing market in renewable energy."
He added that the transaction is consistent with the company's strategy to significantly increase its high-quality revenue-generating assets in strategic territories while combining growth engines to establish a robust and long-term stable cash flow, alongside developing significant infrastructure projects to create entrepreneurial profit.
The parties are working towards signing a binding agreement and completing the transaction by December 31, 2026. Solair has been granted an initial exclusivity period of three weeks, which will be extended by an additional 12 weeks upon submitting an application for approval to the Foreign Investment Review Board (FIRB) in Australia. Completion of the transaction is subject, inter alia, to the completion of due diligence, achievement of operational targets for the total solar capacity, receipt of regulatory approvals and lender consents, and finalization of financing arrangements.
Solair's entry into Australia follows a series of significant moves by the company recently. Earlier this month, Solair reported the signing of a binding financing agreement of approximately 65 million dollars for the construction of the Calbuco wind project in Chile, comprising about 47.2 MW of capacity alongside roughly 80 MWh of storage.
Additionally, at the beginning of the month, Solair updated that it signed a binding power purchase and sale agreement (PSPA) to acquire a solar portfolio in Poland with a total capacity of approximately 268 MW, for an expected consideration of about 175 million euros. The transaction is carried out via a Polish-registered purchasing vehicle, held through a chain of ownership with 51% by Solair and 49% by Clal Insurance.
During a full average operating year for all projects (based on 100% ownership), the portfolio is expected to generate revenues of approximately 27.6 million euros, an EBITDA of about 18.4 million euros, and an FFO of roughly 15.7 million euros.
