🇸🇪 Axfood and Alight sign power purchase agreement (PPA) to build Sweden’s largest solar park by threefold, marking a new era for solar

Press release from Alight

Alight and Axfood, a prominent food retail group in Sweden that includes Willys and Hemköp, are pleased to announce that they have signed a power purchase agreement (PPA) to build Sweden’s largest solar park by threefold. The scale of the solar park unlocks the possibility to use non-recourse project financing for the first time, signaling a shift in feasibility of large-scale solar in Sweden.

Alight will build, own and operate the 64 MW solar farm in Hallstavik outside Norrtälje, Sweden, and Axfood will purchase the clean energy at a low, fixed price for 12 years. This will help Axfood to better hedge against market volatility. Thanks to Axfood’s commitment to buy energy from the project, Alight can invest in the project and add new renewable power capacity to the Swedish grid.

The solar park, which will be about 71 hectares (equivalent to 101 football fields), will deliver an expected annual production of about 63 GWh (equivalent to the electricity consumption of roughly 12,600 villas), making it roughly three times larger than any solar park in Sweden at the estimated date of commissioning. Construction will begin this week and the solar park will be operational in Q2 of 2024.

Axfood and Alight had originally investigated the possibility of building a solar park in Skåne, but have now instead jointly chosen the area in Hallstavik due to the land’s low natural values. At the same time, the project will promote biodiversity by installing wood mold boxes, bat houses and sand beds for bees, among other things.

The park will be Sweden’s first solar asset financed with a dedicated non-recourse debt facility  — a type of financing used extensively to finance wind assets in the Nordics and solar assets in other parts of Europe. As first movers in Sweden, Alight has experienced a strong appetite among lenders to finance the company’s quickly growing pipeline of PPA backed solar assets. While solar parks in Sweden have been historically financed with equity, the shift to debt financing signifies Sweden’s state of readiness for the next wave of major solar developments. For the Hallstavik project, SEB, a leading northern European financial services group, will provide the debt financing. Alight was advised on the financing by Newsec Infra, acting as financial advisor, and MSA, acting as legal advisor.

Harald Överholm, CEO at Alight, says: “Combating climate change is truly an all-hands-on-deck challenge and it’s exciting to see one of Sweden’s most respected companies, Axfood, taking the lead in enabling the buildout of more renewable energy. We’re proud that this will be Sweden’s largest solar park at the time of commissioning, and the fact that this is the first time non-recourse project financing will be used to build a solar park in Sweden is also a great milestone that signifies a promising shift in the feasibility of renewable energy projects to come.”

Klas Balkow, President and CEO at Axfood, says: “While we have our sights set on continuing to reduce our environmental impact, we also want to contribute to increasing the amount of renewable electricity on the market. By partnering with Alight, we’re proud to be able to drive the development of Sweden’s largest solar park to bring more green energy to the country.”

About Alight

Alight is a leading solar developer and Independent Power Producer, founded in 2013 to usher in a new era of solar power to businesses seeking to go greener. With an entirely subsidy-free business model, Alight develops, owns and operates solar projects, onsite and offsite, across Europe. By 2030, Alight is set to have an installed capacity of at least 5 GW backed with solar Power Purchase Agreements (PPAs). Alight is developing more than 1 GW of PPA-based projects across Sweden, with a further 250+ MW under development across the rest of Europe. Alight is also leading the industry on co-located battery storage, a key component of ensuring that grid stability copes with the solar roll-out.

About Axfood

Axfood aspires to be the leader in good and sustainable food. Our family of companies includes the store chains Willys and Hemköp as well as Tempo, Handlar’n and Matöppet. B2B sales are handled through Snabbgross, and our support company Dagab is responsible for the Group’s product development, purchasing and logistics. The Axfood family also includes Middagsfrid and Urban Deli as well as the partly owned companies Apohem, Eurocash, City Gross and Mathem. Together the Group has more than 12,000 employees and sales of more than SEK 70 billion. Axfood has been listed on Nasdaq Stockholm since 1997, and the principal owner is Axel Johnson AB. Read more at www.axfood.com.

Originally published on 21 June.