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Deal 5: Sun Investment Group GC Maciej Kalinowski on Solar Park Portfolio Sale in Poland

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On September 28, 2020, CEE Legal Matters reported that Clifford Chance had advised Sun Investment Group Polska on the sale of a 170 MW solar park portfolio currently under development to Ignitis Renewables. CEEIHM spoke with Maciej Kalinowski, General Legal Counsel at the Sun Investment Group, to learn more about the deal.

CEEIHM: So our readers get a bit of background, can you please share with us a few words about the Sun Investment Group?

Maciej: The Sun Investment Group is a firm originating from Lithuania focused on investment management as well as the development and construction of photovoltaic plants. So far, SIG has already completed large-scale projects in Poland, Spain, Italy, and the UK. The group’s companies are also present in the Baltic region as the leading B2B and B2C solar solutions providers. In recent years, SIG has been experiencing rapid growth, including a four-times increase in the number of employees, correlated with the accelerated turn towards renewable energy sources in Europe. Our growth found recognition as Solarplaza placed SIG in Top 50 European Solar Portfolio developers ranking of 2020.

Since it entered the Polish market in 2018, the Sun Investment Group has successfully constructed 109 PV plants and sold part of this portfolio to a reputable investment fund. This milestone positions the Sun Investment Group as one of the leaders of the Polish PV market. Currently, 600 MW of the total 1 GW of the company’s pipeline are planned to be executed in Poland. The recent transaction with Ignitis Renewables is one of the proofs of th Sun Investment Group’s focus on the Polish market and the great opportunities for the future.

CEEIHM: What does the portfolio consist of and what do you believe made it particularly attractive to Ignitis Renewables?

Maciej: The portfolio to be sold to Ignitis Renewables will consist of turnkey photovoltaic plants with a total capacity of up to 170 MW. Revenues from these projects will be secured by 15-year contracts for difference under the Polish auction support scheme. Completing this portfolio will conclude the largest transaction in Central Europe in the solar market. The track record in the Polish market proves that the Sun Investment Group is a reputable and stable partner. Most importantly, the Sun Investment Group is one of the 50 largest and most trusted market players in Europe, showing a very high success rate of developed projects in the past. These reasons, among others, must have convinced Ignitis Renewables to turn to the Sun Investment Group.

CEEIHM: What would you say was the most complex aspect of the transaction from a legal perspective?

Maciej: I would say that the most important aspect that we had to focus on was making sure that the requirements of the Polish regulatory framework were properly transposed into the typical corporate elements of the transaction. Ignitis Renewables expects to take over fully operational PV plants. As in other European markets, the energy sector in Poland has quite a lot of regulations that need to be taken into account when constructing a PV plant. Thus, it is one thing to draft the shares purchase agreement, and an entirely different challenge is to make sure that the agreement complies with the regulations applicable to the PV plants and foresees challenges resulting from these regulations for the successful commercial closure of the transaction. I am satisfied that we managed to work out the transaction in a manner that secures the interests of both sides.

CEEIHM: What was Clifford Chance’s mandate specifically? What did they advise on to make this deal happen?

Maciej: Clifford Chance supported us throughout the negotiation process of the entire transactional documentation. They were responsible not only for the completion of legal documentation but also helped us translate business aspects of the deal into legal solutions satisfactory to both sides. They assisted us with the preparation of subsequent iterations of the preliminary shares purchase agreement as well as all the accompanying documents.

CEEIHM: And while on the subject, why did you turn to Clifford Chance for assistance in this matter?

Maciej: Clifford Chance is known in Poland for its premium quality of legal services in the fields of energy and mergers & acquisitions. I decided to rely on them specifically since the legal team supporting us was composed of individuals who merge expertise in both fields. It was of great importance to the successful closure of the deal to have on our side lawyers who were capable of grasping not only the legal but also the commercial aspects of this transaction. It was invaluable to have the insight of Clifford Chance’s lawyers into all aspects of the deal.

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