Information on the target
COFIDES S.A., the Spanish Development Finance Company, has committed to acquiring a 15% stake in Solar Power Plant One Lda for EUR 9.47 million, utilizing resources from the Fund for Foreign Investment (FIEX). This investment is part of a larger project totaling EUR 315.8 million, which marks a significant step in the development of hybrid solar-gas energy solutions in Algeria. The project, known as the "Hybrid Solar-Gas Project at Hassi R’Mel," aims to construct a 150 MW combined cycle electric power station, with 25 MW generated from solar energy.
The project is notable for being one of the first hybrid solar-gas initiatives globally and is set to be completed within 33 months. The concession for its operation will last for 25 years, during which the electricity produced will be purchased by SONATRACH, the Algerian state-owned company specializing in hydrocarbons. This innovative approach combines traditional combined cycle technology with solar hybridization, utilizing parabolic mirrors and Integrated Solar Combined Cycle (ISCC) technology.
Industry overview in the target’s specific country
Algeria's energy sector is undergoing significant transformation as the government implements structural policies aimed at modernizing the hydrocarbons industry and enhancing market competitiveness. The "Hybrid Solar-Gas Project at Hassi R’Mel" aligns with the Algerian government's broader initiative to promote renewable energy sources, targeting an increase in renewable energy production to 5% of the total energy output by 2010. This ambitious goal reflects Algeria's commitment to diversifying its energy portfolio and reducing reliance on fossil fuels.
The Algerian government has recognized the importance of attracting private investment to achieve these objectives, leading to the establishment of various incentives and frameworks to facilitate the entry of foreign capital into the renewable energy sector. This shift is crucial for the country, which has historically depended on oil and gas revenues, to ensure sustainable energy development and environmental stewardship.
Moreover, the project is considered a potential Clean Development Mechanism (CDM) facility under the Kyoto Protocol, which underscores its positive environmental impact. By generating 5% of its electricity from thermo-solar power, the project not only contributes to Algeria's energy goals but also positions the country as a participant in the global effort to combat climate change.
The rationale behind the deal The rationale for COFIDES's investment in Solar Power Plant One Lda is rooted in the strategic alignment with Algeria's energy reform agenda and the growing demand for renewable energy solutions. B…