EAM: Proposed regulatory change in Italy and P31 closing
18th of June 2014
Today the Italian Government has announced that they expect to propose to the Italian Parliament changes to the regulatory and financial regime of the electricity sector in Italy. The purpose is to reduce the overall electricity bill for households and small business by 10%, equivalent to approximately EUR 3bn.
As part of the measures proposed to achieve such a reduction, the Government of Italy proposes measures that will affect the revenues received by solar PV power plants through the FIT contracts with GSE. The proposed measures are either through a reduction in the annual FIT revenues ranging from 17% to 25% depending on the remaining contract lifetime and a 4-year prolongment of the contract period, or through a voluntary 10% annual reduction in the FIT. The Governments proposal may be officially proposed to the Parliament during the next couple of weeks.
EAM Solar ASA is in the process of closing the acquisition of the P31 portfolio and expects to do so within short. EAM has been aware of the Governments possible proposal to changes in the Italian power tariff regime, and has taken such change into consideration in the ongoing valuation negotiations of the final purchase agreement. Consequently, a FIT change should not affect the expected capital return from the acquisition.
Reference is made to previous Stock Exchange releases, financial reports for the fourth quarter 2013, first quarter 2014 and prospectus issued in conjunction with the private placement.
Overall EAM Solar consider the possible tariff changes to contribute positively to the solar power plant transaction market and open further strategic opportunities in Italy. EAM Solar currently evaluates several opportunities that may represent further step changes for the company.
The regulatory changes will have a limited effect for the existing power plants in the EAM portfolio due to their financial structure.
For information, please contact:
Viktor E Jakobsen, Executive Director, phone +47 9161 1006, viktor@eamsolar.no
Audun W. Iversen, CEO, phone +47 916 16 250, audun@eamsolar.no
About EAM Solar:
EAM Solar ASA is a utility company that acquires and operates solar power plants. The Company currently owns solar PV power plants in Italy, acquired during in 2011/12. The plants are operating under long-term sales contracts. EAM Solar acquires power plants that are commissioned, connected to the grid and in power production at the time of financial close with the geographical focus on Europe.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.