ETX Accomplishing So Much

JOAKIM KINDAHL, Carnegie Securities (10/29/2010)
"Etrion is a pure downstream player focusing on developing, financing and operating solar parks. Located in sunny Italy, the company operates 40MW of solar power with another 200MW to be connected in the next couple of years. This gives a lot of potential for growth in the near term.

The attractiveness of Italy for a solar business is not just solar irradiation as the Italian government has ambitious plans of increasing the share of renewables in the electricity mix. The country has an attractive feed-in-tariff schedule that pays a fixed fee plus a market rate for each kWh generated, and as solar power has a very low operating risk, banks are willing to lend up to 80%–85% of the total investment at very attractive rates in the form of non-recourse loans. The effect on the return on invested equity is, of course, very good.

The company is only a few years old, but it has accomplished much, with close to 60MW permitted capacity and a pipeline of another 200MW in the years ahead. It is 45% owned by Lundin Petroleum. . .the advantage Etrion has had from being part of the financially strong oil company and the support of the Lundin family should not be underestimated, and it is a main explanation of how the company has achieved such a strong place in the solar energy industry in the past year."

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