The M&A (mergers and acquisitions) of solar energy is on the rise in Brazil. In 2024 alone, more than 20 assets photovoltaic were publicly traded until September, totaling 515 MWp of power.
The numbers represent a 89% increase in transactions between acquisitions of plants and companies compared to the same period last year, according to data recently released by greener.
Furthermore, considering all assets transacted until the end of the third quarter, there was a 21,4% increase in mapped operations compared to the whole of 2023.
O growth of this type of market in Brazill was one of the themes discussed by professionals from the photovoltaic sector on the second day of Canal Connect, a congress held by the Canal Solar, at the Camargo Guarnieri Cultural Center, in São Paulo (SP).
In a discussion mediated by Bruno Kikumoto, CEO of Canal Solar, Ciro Fusaro, commercial director of Brasol's Solar BU; Christiano Forman, CEO of Albioma in Brazil; and Geraldo Silveira, engineering manager at CS Consultoria, discussed the subject.
Fusato shared some of his experience in seeking to acquire solar assets in the market and highlighted that some criteria are fundamental for a good negotiation be realized.
Among them, the professional highlighted a good analysis of documentation of the enterprise, the asset power generation quality and if it has partnerships established with good clients.
“To start a negotiation, anyone who wants to sell an asset needs to have very organized documentation. This greatly speeds up the entire process for both sides (both those who want to buy and those who want to sell),” he highlighted.
Regarding the quality of the asset, the professional explained that this analysis is measured by several factors, such as: how the asset was built and what technologies were selected to compose the plant. “This is essential for us to understand what performance this asset will have,” he emphasized.
“It is also necessary to analyze whether this asset has a good client and a good PPA contract. This greatly increases the value of the negotiation for those who are selling an asset, which brings a long-term and low-risk PPA,” he commented.
How much does it cost to purchase a plant?
Regarding the cost of a plant, Forman said that the asset pricing is done based on a methodology: the discounted cash flow.
In it, the company projects the future cash generation result of the project and uses a discount rate (combination of the return that the asset owner wants with the financing costs) to calculate the value of the plant.
For this reason, the professional highlights that the values tend to vary a lot depending on the characteristics of the project.
“A fixed asset will have a different value than one with trackers, because the production is different. An asset that compensates for energy in a distributor, where the price is higher and has higher revenues, is worth more than others. So, it can vary a lot”, he revealed.
In addition to these factors, the Albioma professional also commented that the final calculation takes into a comparison with other similar plants on the market, so that the purchasing company can assess whether the acquisition price is above or below the current price.
After that, risk scenarios are also analyzed before starting the negotiation process – where values will be discussed so that the price of the asset meets the expectations of the seller and buyer of the asset.
Due Diligence
With the M&A market increasingly booming, it is essential that investors have the security that the parks acquired will guarantee the expected return.
In this scenario, the Due Diligence becomes an indispensable step to ensure the viability and success of the investment. But, after all, what does this term mean and why is it so important?
The answer to this involves the fact that Due Diligence is, in essence, a process of investigation and detailed auditing that aims to evaluate the technical, financial, legal, operational and commercial aspects of a company or asset before a transaction.
In this process, the evaluation of the technical aspects of a plant ends up being based on several analyses, from the project planning stages to the operation and maintenance of the plant in question, as explained by Silveira.
Within this process, the CS Consultoria professional highlights that the field visit to analyze the asset and carry out some tests is extremely important to the quality, safety and productivity projection of the plant.
During the , other important details were also discussed, seeking to inform the public about strategies for the safe acquisition of photovoltaic plants.
According to him, the lack of analysis brings risks to the acquisition of assets, since neglecting the Due Diligence steps will result in important technical information being non-existent, compromising the entire financial planning of the asset.
“If the buyer does not know, for example, the plant’s performance data, there is no way to draw up a financial plan for the plant,” Silveira stressed.
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