Portugal's Galp inks Eur2.2 billion solar expansion deal

Barcelona — Portuguese oil and gas group Galp agreed a Eur2.2 billion ($2.4 billion) deal to buy a portfolio of existing and planned solar photovoltaic projects in Spain from Spain's ACS Group, a deal that should propel Galp to become the largest solar player in the Iberia region.

The agreement, announced by the companies late Wednesday after market close, covers 2.9 GW of existing and planned generation capacity.

That includes over 900 MW of power generation capacity recently commissioned and a pipeline of projects at different stages of development to be installed through 2023.

Some 500 MW of capacity included in the transaction is estimated to be online this year, 900 MW next year and 600 MW in 2022-2023.

All projects have secured the respective access to the grid permit, Galp said.

Other oil players in the region, such as Repsol, Eni and Cepsa, have all made moves to enlarge their renewable footprints as the EU continues to drive towards decarbonization.

The Galp-ACS transaction includes the acquisition, development and construction of the projects. Completion of the transaction, which is subject to certain usual conditions, is expected during the second quarter.

Galp said it could also look to bring a potential partner on board.

The renewable additions are aligned with Galp's strategic and capital allocation guidelines, which consider 10% to 15% of future investments allocated to the development of a competitive renewable and new businesses portfolio, the company said.