REG - Corre Energy B.V. - US Portfolio Update

Corre Energy BVAnnouncement

25/07/2023 07:00

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RNS Number : 0168H  Corre Energy B.V.  25 July 2023

25 July 2023

 

Corre Energy B.V.

("Corre Energy" and the "Company")

US Project Conditional Acquisition & Portfolio Funding Update

Corre Energy to accelerate international portfolio growth with first US
project

 

·    Exclusivity agreement signed to acquire 280MW CAES project using
three salt caverns

·    First strategic entry into high-growth US market with its supportive
regulatory environment

·    Project to target FID in 2025 and consistent with Company target to
achieve high teen IRRs

·    Acquisition adds to recent German agreement which doubled near-term
European project pipeline

·    Supports overall 1.3GW storage construction target by 2026 with
anticipated equity sell-downs at project level ahead of FID

·    Portfolio-wide, project-level funding process underway with
institutional investors

 

Corre Energy has entered an exclusivity agreement to acquire a further
compressed air energy storage (CAES) project for its expanding international
portfolio, marking the Company's first investment in the fast-growing US
market. The 280MW project in the West Texas region of ERCOT comprises three
pre-constructed salt caverns and the Company is targeting financial investment
decision (FID) in 2025.

 

The exclusivity agreement to acquire 100% of the project assets has been
signed with Contour Energy LLC, a Texas-based energy storage developer.
Contour Energy will provide an experienced on-the-ground team and work closely
with Corre Energy to complete the project.

 

The Texas project is supported by a positive economic environment, including
the Inflation Reduction Act and extended Investment Tax Credit offered by the
US government, representing an attractive entry point into the US market for
Corre Energy. The project is consistent with the Company's strategy to realise
high teen IRRs by building an international portfolio of high-quality assets
that also provide opportunities to sell down project equity ahead of FID.

 

Confirmatory diligence and project finance arrangements for the Texas
acquisition are now underway. The transaction by Corre Energy US Development
Company LLC, the Company's North American subsidiary, is expected to close
later this year. Funding for North American acquisitions will run in
conjunction with the Company's wider funding process as detailed below and is
expected to be structured to complement Corre Energy's projects and portfolio
growth in Europe. Further details on the Texas project, including project
funding, key milestones, timescale for completion and expected financial
returns will be published in due course.

 

The Texas project supports Corre Energy's pathway towards 1.3GW of storage in
construction by 2026 across the portfolio. It follows a landmark option
agreement last month to secure four existing salt caverns totaling over 500MW
in Germany, doubling Corre Energy's European project portfolio. The Company
recently announced a key milestone with the commercial close of its 320MW ZW1
project in The Netherlands. Corre Energy remains on track to achieve
commercial close on its 320MW Danish project in H2 2023.

 

Project-level portfolio funding

Corre Energy's plan to secure a suitable long-term project funding partner is
progressing well.  The Company is in the process of securing investment with
interest from a range of institutional investors to fund Corre Energy's
high-quality portfolio, targeted at project level. The process is well
advanced with advisers appointed to support the Company in selecting a
preferred funding solution and partner(s). The process is expected to be
completed in or by Q4 2023 and further updates will be made in due course.

 

Keith McGrane, Chief Executive Officer of Corre Energy, commented: "This
maiden US project fits squarely with our strategy to build a high-quality
portfolio of compressed air energy storage assets, deliver high teen returns
and provide timely equity sell-down opportunities at project level. Our track
record and ambitious plans have translated into demand from institutional
investors seeking to fund our portfolio and we look forward to choosing the
optimal solution to power our future plans."

 

ENDS

 

 Corre Energy                                         ir@corre.energy

 Chet Lyons, President                                +1 978 930 0760

 Corre Energy US Development Company LLC              chet.lyons@corre.energy

 Davy (Euronext Growth Listing Sponsor)               +353 87 689 9195

 Barry Dixon, Head of Decarbonization Finance         barry.dixon@davy.ie

 Murray PR (Financial PR and IR)                      + 353 87 226 9345

 Pat Walsh, Managing Director                         pwalsh@murraygroup.ie

 

 

About Corre Energy:

Corre Energy designs, develops, constructs, and operates utility-scale Long
Duration Energy Storage (LDES) projects in Europe and North America. Through
our project development activities, Corre Energy is working to accelerate the
energy transition to net zero, while enhancing the security and flexibility of
large-scale energy systems.

 

About Contour Energy:

Contour Energy LLC has more than 70 years of combined management experience in
the development, financing, start-up, and operations of over $1 billion of
assets in the power, upstream, midstream and renewable energy spaces.

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