The KGAL fund ESPF 5 has made its first foray into the Czech Republic by acquiring the 50MW solar project PVPP Saxonie, located near the northern Bohemian city of Most. This marks the fund’s eleventh transaction and its entry into a sixth European country. The final closing of this Article 9 impact fund is scheduled for October 2024.
The Czech Republic is becoming increasingly attractive to investors due to its ambitious climate targets, which have been revised upward several times, according to KGAL. The country aims to more than double its solar power capacity from the current 3.6GW to 8GW by 2030, while its wind power target is set to triple to 1.5GW.
André Zücker, co-chief executive of KGAL, highlighted the supportive investment environment, noting that state subsidies are being provided to help achieve these ambitious targets. “Solar and wind projects are responding with dynamic expansion,” Zücker stated.
The Czech energy market offers additional advantages, including low electricity price volatility and a spot market traded in euros. However, a significant portion of the country’s energy mix—over 40%—still comes from coal-fired generation, resulting in a CO2 impact that is above the EU average.
Zücker emphasized the high environmental impact of the KGAL ESPF 5 fund, saying, “With the climate-neutral electricity from the solar park near Most, our fund will achieve a particularly high impact.”
Construction of the PVPP Saxonie project is set to begin soon, with grid connection planned for the third quarter of 2025. The electricity generated will primarily be sold through a long-term Power Purchase Agreement (PPA).
The project was sold by Sev.en Inntech a.s., a Czech company that also operates the local power grid to which the solar park will be connected next year.
