Ecoener tesis inversion

Ecoener BME:ENER – Renewable energy IPP full of potential

Ecoener is an Independent Power Producer (IPP) specialising in renewable energy with a diversified portfolio of assets in hydroelectric, wind, and solar PV technologies and presence in Spain, R. Dominican, Guatemala, Nicaragua and Colombia (plus a pipeline in Greece, Italy, Poland, Italy and Ecuador – in addition to the current countries)

As of today, it has 341 MW in production. Of these, it has 55MW of hydroelectric and 104MW of wind power – the load factors (hours of energy production) of these two technologies are much higher than those of photovoltaic. Furthermore, it has 399MW under construction. Almost half of them are located in Spain, but the vast majority of assets under construction are in other geographies (and it is expected to continue to be so in the future). Also important to highlight that, it has exposure to both spot prices and Power Purchase Agreements (PPAs), which we’ll delve into in detail later.

Why do we believe that the current Ecoener share price is attractive? 

With Ecoener, we followed the same process we always do. We look at which industries, from a macro perspective, may represent an attractive short-to-medium term investment, and then we start analyzing them. In this case, we saw that in the European renewable energy sector is happening similar to other industries (as we commented this week with Italian Wine Brands), due to supply chain issues and cost increases impacted the industry last year, the majority of companies in this sector are trading much cheaper than they did before the pandemic despite of its growth. However, because of the war in Ukraine and high electricity prices, companies are making a fortune (something we expect to remain unusually high for a few years). Consequently, we have started to look into this sector again. In particular, companies with significant exposure to the spot market, and that’s how we saw the great attractiveness of Ecoener. Briefly:

  • First, we like the management. Both for the decisions taken in recent years and for its execution capacity & knowledge (Capex, the pace of delivery, etc.) This has been a pain point in our latest renewable energy adventure with Greenalia (which was taken private last May at €17.5).
  • Second, multi-technology IPP. It is important to highlight the significance of this point, as there are many PV companies with more installed MW, but it is all about the load factor, and wind & hydro factors are much higher than solar.
  • Third, price. Ecoener is trading cheaper than its peers, well below its initial IPO price, and the company is more mature, has a reliable track record after two years of being publicly traded, and has considerably increased its MW in operations in 2022.
  • Fourth, prospects for the future. We like several aspects here: Dominican Republic projects coming online this year, bringing 15 years of secured revenue; high electricity prices in Spain for the foreseeable future; expansion towards Eastern Europe and North America, as well as Colombia, Ecuador, and the rest of the capacity coming online; the fact that 80% of its debt is fixed,…
MORAM Ecoener

His founder and CEO owns 70% of the company (he has been in charge since 1988), in May 2021, Ecoener went public on the Spanish stock market (BME Growth), raising around €100 MM (at €5.9) to fund its growth strategy, which has been very aggressive since then. In the last three years, they have nearly tripled their assets, expanded across several countries in LatAm, and begun their expansion into Europe, where they are starting construction in Greece at the end of 2025. The company currently has a market capitalisation of €200 MM.

As an IPP, Ecoener builds and owns its assets, which sets it apart from EPC companies which business is to build the plants to sell them thereafter.

These types of companies are characterized by high leverage, especially during expansion phases, as once in production, they have stable income for 20-25 years.

Today, we analyze in detail this interesting company, diversified, expanding, and with stable revenues. To do so, we study all its operational and under-construction assets, its debt and management, and conduct a valuation of its shares.

Ecoener Assets and Strategy in detail

At previously stated, at the moment Ecoener has 341 MW in production and 399 MW in construction. Ecoener’s renewable energy assets are spread across three main technologies: hydroelectric, wind, and solar PV. However, there are significant differences. Hydroelectric power was mainly developed in Galicia in the company’s early years. Subsequently, there was a major investment in wind power in the Canary Islands (these assets have special regulated conditions). In the last two to three years, they have purely focused on the solar pipeline, as evidenced by the over 250MW between operation and construction in the Dominican Republic, for which they have signed 15years PPAs with spectacular conditions ($88/MWh) – The projects in the Dominican Republic have an EBITDA margin of 91%.

It is important to mention that in Spain, Ecoener sells the electricity generated by its assets on the spot market (Galician assets, Canary Island has a regulated regime), while in Latin America, it sells energy through power purchase agreements (PPAs).

Hydroelectric Assets

Ecoener has a total of 55 MW of hydroelectric assets, with the majority located in Spain (with the exception of 14.2 MW in Guatemala). These assets boast an average load factor of 34%, contributing significantly to the annual energy production.

MORAM Ecoener Hydro assets

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