January 22, 2020 / 7:13 PM / a month ago

Portugal's Galp bets big on solar power with ACS deal

FILE PHOTO: View of a petrol station of GALP company near Lisbon February 11, 2013. REUTERS/Rafael Marchante

LISBON (Reuters) - Portuguese oil and gas company Galp Energia (GALP.LS) will buy solar power projects from Spain’s ACS (ACS.MC), envisaging total spending of 2.2 billion euros in the next four years and making Galp the leading solar power producer in Iberia.

Galp said in a statement on Wednesday it would pay ACS 450 million euros when the deal for a total of 2.9 gigawatts of capacity, most of it yet to be built, is closed, and assume 430 million euros worth of project finance debt.

It expects to close the deal in the second quarter of this year.

The rest will be invested in the development and construction of the projects, it said, adding that it saw potential opportunities to bring in a partner to its renewable energy ventures.

“The portfolio includes a range of high-quality projects, with attractive returns, which support Galp’s strategic ambitions and place the company as the leading solar photovoltaic player in Iberia,” the statement said.

CEO Carlos Gomes da Silva said the deal reflected a “discliplined” decision which was in line with the company’s guidelines of allocating 10% to 15% of future investments to renewables and new businesses.

Galp’s net investment during the 2020-22 period is expected to remain at an average 1 billion to 1.2 billion euros per year, taking into consideration potential divestments, Galp said.

Reporting by Andrei Khalip; Editing by Kirsten Donovan

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