KGAL ESPF 5, a renewable energy fund, has established a joint venture with IMCS to collaborate on developing battery energy storage systems in Italy. The collaboration is develop four battery energy storage systems, with a total capacity of 1,100 MW. The two entities will develop the projects at an early stage and sell them to willing buyers at the ready-to-build stage.
KGAL, which is an independent investment and asset management company based in Germany, has previously collaborated with Italian firms for its solar projects that were related to its predecessor fund. This collaboration with IMCS will help to diversify the portfolio of its KGAL ESPF 5 Article 9 fund, which is open for commitments till October.
Meanwhile, IMCS already has significant experience in developing large-scale solar projects in Italy. With this deal, the investors are hopeful of good returns, especially as energy storage is gaining significant traction across Europe to address intermittency concerns of renewables.
REGlobal’s Views: Development of projects and then selling them at ready-to-build stages is quite common in wind and solar space, as these projects find good value from developers keen on rapid expansion of portfolios, with hassles of early development work already done. This trend is catching on in the utility-scale storage space as well which is growing at a rapid pace owing to demand for balancing reserves for grid stability.
