A significant milestone for Ashtrom Group (TASE: ASHG) in the renewable energy sector. The Group announces the signing of the first PPA agreement for a long-term sale of electricity in the U.S. market. As part of the agreement, a dedicated project company, jointly owned by the Ashtrom Group and Kenlov Renewable Energy, will sell electricity generated by the Tierra Bonita project in the U.S., in the total capacity of about 235 MWdc (about 60% of the total capacity of the project) and the green certificates for it. The electricity will be sold to CPS Energy, the municipally owned electric and natural gas utility of the City of San Antonio, Texas – which is rated at Aa2 by Moody's - and will be supplied to the utility at a fixed price for a period of 20 years. The remaining project-generated electricity and its green certificates will be sold on the open electricity market in Texas.
Tierra Bonita project is a large-scale solar project in Texas, USA, covering an area of approximately 9,000 dunams, and already achieved major development milestones, including the securing of its main land rights and signing of a grid connection agreement. According to the company's assessment, completion of the project development processes, and the start of construction should take place in the second quarter of 2023, and its commercial operation is expected at the end of 2024.
It should also be noted that CPS Energy is the municipally owned energy company of the City of San Antonio, the seventh-largest city in the U.S., with about 1.5 million residents, serving more than 900,000 customers in the electricity and natural gas sector. The PPA and the high credit rating of CPS Energy as a long-term electricity buyer, are expected to enhance the project financial fundamentals.
Yitsik Marmelshtein, CEO of Ashtrom Renewable Energy: "This agreement signifies a major milestone in our investment activity in the U.S., and reflects the continued progress of our renewable energy activity in this market for the long term. We are currently working on advancing other PPA agreements for additional projects that we are developing in the U.S. At present, our renewable energy development pipeline in the US includes projects in various development stages in the U.S., with total planned capacity of ~1.5 Gigawatts. We are aiming to expand our investments in the renewable energy sector, mainly in the U.S and in Europe".
Ashtrom Renewable Energy operates in various geographic markets worldwide, with an emphasis on the U.S. and Europe. This project is part of several projects the company holds, together with a partner, Kenlov Renewable Energy, in Texas and Idaho, USA. These projects, developed by our development partner OnPeak Power which include the current project, are in various development stages, with a total capacity of c. 1,500 MW.