ACQUISITION OPPORTUNITY

ABOUT THE COMPANY

We are pleased to present the sale of a company that owns a prime building plot of 51.692m², featuring several structures totalling 741m². Both the land and the buildings are fully registered with the Cadastre, ensuring a clear and clean ownership title. There are no encumbrances or notices affecting the property, providing peace of mind to potential buyers.

A significant asset of this Company is its design and connection solution (uslovi za projektovanje i priključenje solarne elektrane), issued by Electric Power Distribution of Serbia (Elektrodistribucija Srbije). This approval is essential for constructing a solar power plant and connecting it to the electricity distribution system (DSEE). The solar power plant has an approved capacity of 999 kW, and notably, the issued conditions do not require the installation of batteries for energy storage. This means that all generated electricity can be sold directly to the market through the approved connection to electricity distribution system (DSEE), significantly reducing both investment and operational costs. The absence of battery storage requirements eliminates the need for installation, maintenance, and eventual replacement, making this an exceptionally cost-effective solution. It is important to highlight that such licenses are no longer being issued, adding to the uniqueness of this opportunity.

Solar power plant

The company has a legally binding Design and Connection Solution for a solar power plant AND a connection of this SPP to the national electricity transmission grid system (DCEE) without storage batteries.

1. Key technical data about the SPP:
1. Approved power plant: 999kW, which means that the power plant can deliver 999kW to the distribution system every hour, 24 hours a day, 365 days a year. In other words, theoretically, the power plant could deliver 8,751.24MW of electricity to the distribution system on an annual basis. This solar power plant is not obliged to use batteries to store the generated electricity, which makes the whole investment particularly attractive. However, the possibility of using batteries should be investigated in order to increase the possibility of selling electricity to the distribution system. From a financial point of view, the breakeven point of the project's profitability should be looked at and, based on that, the largest possible sale of electricity to the distribution system should be planned
2. Number of inverters in the power plant: 10
3. Mode of operation: The power plant works in parallel with DCEE, with the delivery of electricity to DCEE in its entirety (except for own consumption).



2. Connection method and technical description:
1. Connection type: individual
2. Connection character: permanent
3. Place of connection of the power plant to the DCEE: Direct cable connection to the transformer of 20 (10) kV from the building of the SPP where all production equipment is housed
4. Connection to the DCEE Network: The SN cable for connection to the DSEE extends from the construction parcel and runs alongside the existing public road to the existing 10kV power line (it does not cross private land), which is about 100m away. The transformer station 35/10kV/kv is slightly further, at a distance of about 200m.
5. The rated voltage of the network at the point of connection to the DCEE is Un =10kV. After the cancellation of the 35/10kV transformation, the nominal network voltage at the point of connection of the power plant to the DCEE will be Un =20kV.
3. Validity of Decision: The decision was issued on October 13, 2023, and the conditions stated therein are valid for 24 months. Parties can submit a request for extension of these conditions 30 days prior to the expiration of the validity period.
4. Other technical conditions and details are contained in the approval document, which will be made available to the potential buyer during his due diligence process.

Versatile potentials of the construction land

The land, designated as a construction plot of nearly 5,2 hectares, offers a variety of potential uses. Approximately 1,1 to 1,3 hectares of this area are suitable for the construction of a solar power plant. The remaining land can be utilized for diverse purposes, including:

1. Expansion of the solar power plant: additional capacity can be developed to increase energy production;
2. Construction of production facilities: the land can accommodate production facilities that utilize electricity generated by the solar power plant for their operational needs, with the option to sell any surplus energy back to the power grid;
3. Logistics and distribution centre: given its proximity to the future highway and connections to the Hungarian and Romanian borders, the site is ideal for establishing a logistics and distribution centre. This facility could also leverage electricity from the solar power plant, selling excess energy to the grid;
4. Sale of Excess Land: the new owner has the option to sell off approximately 4 hectares of the land while retaining the portion designated for the solar power plant, should they choose to focus solely on electricity production;
5. Other Development Opportunities: the remaining land can be repurposed for various other uses, depending on the buyer's vision and needs.

This flexibility in land usage enhances the attractiveness of the property, making it a valuable investment opportunity in the growing renewable energy sector and beyond. With the new highway construction, the value of all land in close proximity always increases.

STRATEGIC LOCATION

The company’s land is situated near the “Smile of Vojvodina” highway, providing excellent accessibility and transportation links. The strategic location of this land, combined with the approved grid connection, makes this an attractive investment opportunity. The potential for solar power generation at this location is significant, and the proximity to the highway ensures easy transportation of materials and personnel. In other words, this building plot is close to and will have an easy access to the highway for distribution of goods manufactured (in a manufacturing plant) or stored (in a distribution centre) on the building plot.

Highway "Smile of Vojvodina"

The Smile of Vojvodina highway is a planned high-speed road that will connect two border crossings with Hungary (Bački Breg) and Romania (Nakovo) and the cities of Sombor, Kulu, Vrbas, Bečej, Novi Bečej, Novo Miloševo and Kikinda.

The highway route starts from the Bački Breg border crossing with Hungary and it ends in the area of the City of Kikinda, the Nakovo border crossing with Hungary.

The construction of this road through Vojvodina was recently confirmed by the President of Serbia, Aleksandar Vučić, when he presented the "Leap into the Future, Serbia 2027" plan. According to the statements of President Vučić, this highway should be finished by 2026. The "Smile of Vojvodina" will be built by the Chinese company China Construction Eighth Engineering Division, the highway will be financed with a loan from the Chinese Exim Bank.

MARKET INFORMATION

The Serbian government has recently adopted the Integrated National Energy and Climate Plan (INECP) for the period until 2030, with projections extending to 2050. This plan aims to significantly boost the share of renewable energy in the country’s electricity mix, targeting 45% from renewable sources by 2030.

Key features of INECP

Key highlights of the plan include:

• Investments in Renewables: Around 3.5 GW of new solar and wind power capacity is expected to be added by 2030.
• Greenhouse Gas Emissions: The plan aims to cut greenhouse gas emissions by 40.3% compared to 1990 levels.
• Energy Efficiency: There will be intensive investments in increasing energy efficiency across all sectors.
• Environmental Protection: The plan aligns with European decarbonization standards and aims to upgrade environmental protection.

This strategic move is expected to enhance power supply security, increase the use of clean energy, and contribute to environmental sustainability.

Sources of funding

The projects under Serbia’s Integrated National Energy and Climate Plan (INECP) are being funded through a combination of sources:

1. European Union (EU) Funding: The development of the INECP itself is part of a project funded by the EU, with an initial investment of €900.000.
2. Public Sector Investments: The Serbian government has allocated significant funds for these projects. The total investment needs for the public sector are estimated at around €10,72 billion until 2030.
3. Private Investments: Attracting private sector investments is also a key component. The cumulative investment needs, including private sector contributions, are projected to reach €27,41 billion by 2030.

These funding sources are crucial for ensuring the successful implementation of the INECP and achieving its ambitious goals.

Private investment incentives

Serbia offers several incentives to encourage private investments in clean energy:

1. Subsidies and Grants: The government provides subsidies for up to 65% of funds invested in energy efficiency measures in private households. This includes investments in insulation, new windows, and biomass boilers.
2. Auction-Based Subsidies: The new law on renewable energy use includes auction-based subsidies, such as market premiums and feed-in tariffs, to support renewable energy projects. These incentives are designed to make investments in wind, solar, and other renewable energy sources more attractive.
3. Corporate Power Purchase Agreements (PPAs): These agreements allow private companies to enter into long-term contracts to purchase renewable energy directly from producers, providing a stable revenue stream for investors.
4. Tax Incentives: There are various tax incentives for companies investing in renewable energy projects, including reduced taxes and exemptions.
5. International Funding and Support: International financial institutions, such as the European Bank for Reconstruction and Development (EBRD), provide loans and technical assistance to support green projects. The EU also co-finances projects aimed at enhancing energy efficiency and renewable energy adoption.

These incentives are part of Serbia’s broader strategy to transition to a more sustainable and green economy.

Commercial banks’ role

Banks play a crucial role in financing renewable energy projects in Serbia through various mechanisms:

1. Providing Loans: Banks like UniCredit Bank Serbia offer substantial loans specifically for renewable energy projects. For instance, the Green for Growth Fund (GGF) recently provided a €50 million loan to UniCredit Bank Serbia to finance utility-scale solar and wind projects.
2. Technical Assistance: Banks often provide technical support to renewable energy developers. This includes assistance with due diligence, construction monitoring, and ensuring projects meet technical and environmental standards.
3. De-risking Mechanisms: Financial institutions use de-risking mechanisms to make green investments more attractive. This can include guarantees, insurance, and other financial instruments that reduce the risk for investors.
4. Partnerships with International Financial Institutions (IFIs): Banks collaborate with IFIs like the European Bank for Reconstruction and Development (EBRD) to secure additional funding and support for green projects. The EBRD, for example, has invested significantly in Serbia’s energy efficiency and clean energy sectors.
5. Promoting Green Finance: Banks are key players in promoting green finance by offering specialized financial products and services that support sustainable investments. This includes green bonds, sustainability-linked loans, and other innovative financing solutions.

These efforts by banks are essential in driving the transition to a more sustainable energy sector in Serbia.

TERMS AND CONDITIONS OF SALE

Join the green energy revolution in Serbia. Please consider our offer.

• Sale of Land or Share Capital: The sale encompasses 100% of the Company’s share capital or the construction land with the approval.
• Acquisition: The buyer will acquire all the property detailed in this document, along with all future financial and other benefits derived from that property, effective from the moment of purchase.
• Ownership: The construction land is registered in the Cadastre, free from encumbrances and notices, ensuring full and clean ownership title.
• Financial Status: The Company has no outstanding debts to banks or other financial institutions, with the exception of a shareholder loan which will be settled prior to the company’s purchase.
• Due Diligence: All relevant documentation will be made available to the buyer for due diligence before the purchase.
• Price: The purchase price is set at €275,000. Please note that no tax is payable on the transfer of shares, the sale of land attracts 2,5% conveyance tax.