Svea Solar expects to achieve financial close in the coming weeks for “several tens of millions of euros” that will support the construction of a 120 MW ready-to-build solar project in Sweden, said Pieter Godderis managing director of the energy company’s utility-scale business.

The developer is in talks with multiple lenders for a wider 145 MW RtB portfolio and anticipates financing will comprise a portfolio financing for smaller parks (10 MW and 15 MW), and project financing for the larger project.

Closing on the 120 MW solar park is expected in early Q2.

The 145 MW RtB portfolio will add to 70 MW of operational assets under Svea Solar’s ownership, taking the developer a step closer to its target of getting roughly 2 GW online by the end of the decade.

“That will cost around EUR 500,000–600,000/MW to realise, so we’re talking about easily EUR 1bn–1.2bn of capital that we require, and a big share of that we hope to be able to finance with debt financing through various lenders,” said Godderis.

He did not disclose a specific leverage target, noting that solar is an emerging technology in the Swedish market, and in some cases Svea Solar may be the first to approach lenders for financing in this area.

This was the case with Skandinaviska Enskilda Banken (SEB), from which Svea Solar secured SEK 350m (EUR 32.31m) in portfolio debt financing late last year. The financing is intended to accelerate development of solar parks across Sweden, including supporting several large-scale projects totalling 80 MW.

In addition to the 145 MW at RtB, Svea Solar’s utility-scale pipeline across Sweden includes 25 MW under construction and more than 3 GW of earlier stage projects, of which 1 GW has preliminary grid connection agreements or is in advanced permitting.

Within the earlier stage pipeline is 500 MW that Svea Solar will develop on land belonging to Stora Enso. The agreement with Stora Enso is part of the developer’s partnership strategy, through which Svea Solar is co-developing projects with larger land owners that may also co-invest to deliver large assets.

The developer also has a development pipeline of around 250 MW in Italy and Cyprus, along with an operating 3 MW asset in the latter.

“But the focus to be clear is Sweden, we are pretty much a Swedish focussed development IPP,” he said.

He continued: “Our prime focus for the coming years is to realise our pipeline, move them from development assets into operational assets,” said Godderis.

Another area that Svea Solar may branch out into in future is battery development, as the markets become more established and prices improve, and a need for battery assets emerges.

Again noting that the Swedish solar sector is only now emerging, Godderis said: “Many of the issues that you see when it comes to cannibalisation and negative pricing etcetera are less of an issue in Sweden as they are in the continent, and therefore there is not an urgent need to install batteries like in Germany, or the Netherlands, or Germany, or the UK. However, I do expect that over time many solar parks will have a collocated battery, also in Sweden.”

Revenue strategy

“All our assets that we have operating are backed by a solar PPA, typically with Swedish corporates or utilities, and that’s our prime way of operating,” said Godderis. “We very much believe in the corporate PPA model and that’s what we work on in order to secure future cashflows from the operations.”

Godderis did not offer specifics regarding price or length, but noted that corporate PPAs in Sweden are typically for around 10 years.

As part of its PPA strategy, Svea Solar has previously signed agreements with companies including Arla, Parks and Resorts, Vida, and Ljusgårda.

The latter agreement is for production from Svea Solar’s 8 MWh agrivoltaics park in Hova, in the Gullspång municipality. Sweden’s first large-scale agrivoltaic park, the asset was inaugurated in September 2024.

PPAs are also already in place that will support the solar projects that Svea Solar has under construction, as well as those at ready-to-build. However, Godderis noted that PPA negotiations are ongoing as the developer considers how to optimise supply from its portfolio.

“We can take the investment decision [on the 120 MW project] now, we just are continuously looking at how we can optimise the PPA allocation to see how we can further optimise our financial returns,” said Godderis.

He added: “We really look at, of course, realising our portfolio and what’s required there…but also looking at, if we have a certain hedge or a PPA option versus another one what does that mean for the bank financing and how can we optimise what type of margins can we get, what type of minimum gearing can we get, etc.”

Godderis continued: “We want to basically…decouple the PPA process somewhat from the asset realisation process. If I have to find a PPA every time a project gets ready to build, I’m very time bound. So what we try to have dialogues with lots of parties, understand what flexibility they have, and then see how we can secure and negotiate certain volumes given a certain confidence level that we have to have the assets ready when we need to start fulfilling the PPA.”

Svea Solar’s revenue strategy also includes participation in Sweden’s ancillary services market.

Godderis noted that the market has seen a dramatic drop in prices compared to very high peaks observed two years ago, but this has little impact on Svea Solar which only views the revenue stream as supplementary.

“It requires from us limited investment to be able to participate on those markets, thus let’s do that, see that as an additional revenue stream, but we don’t…count on it,” said Godderis.

“Because we can’t really make any firm enough prediction on how these markets will develop, we prefer not to include it in our models. [We] just know that historically the value of ancillary services was very high in Sweden [and] moving forward we believe there will be something.”