Zenith Energy (LSE:ZEN) notes the European Commission approved a €23 billion Italian State aid scheme under the Clean Industrial Deal State Aid Framework to support new renewable electricity generation, a development the international energy production and development company says is material for its 188.5 MWp Italian solar portfolio held via WESOLAR S.R.L.
The Scheme is expected to support approximately 37.15 GW of new capacity and will allocate 20-year two-way Contracts for Difference to eligible solar, wind, hydropower and sewage gas projects, stabilising revenues by paying producers the shortfall when market prices are below the strike price and reclaiming excess when prices rise above it.
"The European Commission's approval of this €23 billion scheme marks a major milestone for the Italian renewable energy sector and creates a highly supportive environment for solar project development," said Andrea Cattaneo, Chief Executive Officer.
WESOLAR expects to qualify for the Scheme and intends to participate in the forthcoming competitive bidding for projects above 1 MWp while several of its projects below 1 MWp can access the Scheme directly with administratively set strike prices by ARERA.
Zenith says the availability of CfDs converts development-stage assets into long-term, sovereign-backed income streams, materially enhancing access to construction finance and improving valuations and liquidity for disposals to institutional buyers, which underpins its build-and-sell strategy.
The company adds its first operational asset cluster of three solar plants in Puglia totalling 7 MWp is scheduled to start construction in July with commissioning targeted for the fourth quarter.
