Gemlan Tech Inc. and Trafigura, a global commodities trader and an investor in strategic commodity assets, headquartered in Geneva, today announced they have entered into a 10-year power purchase agreement ("PPA") for the electricity produced by a 17.6 MWp solar PV plant portfolio in Tunisia. The portfolio is jointly owned by Gemlan Tech (76% stake) and the Tunisian government taking a 24% stake, which will also provide turnkey EPC services for the project.
This landmark PPA will cover 100% of the electricity generated and is believed to be the longest-term PPA for a fully unsubsidized solar PV portfolio signed to date in Tunisia. The PPA provides stable and predictable power sales revenues via a fixed price floor but also higher generation-weighted power prices due to an upside-sharing mechanism. As part of the agreement, Trafigura will also act as market representative for the portfolio on the Tunisian wholesale market.
The solar PV portfolio is expected to start producing electricity in the first-to-second quarter of 2025. The expected production is approximately 34 GWh per annum, equivalent to the annual consumption of 12,000 households in Tunisia.
Trafigura was advised for the transaction by legal firm Paul Hastings while Gemlan Tech was advised by Orrick.
Mr. Youssef Nizar, a spokesperson for the Tunisian government, commented: "It is an honour for us to have contributed in a project which will allow the Tunisian market to foster the deployment of this renewable energy source, with a benefit for the entire community. The agreement signed by our government and its valuable partners represents one of the first of this kind in Tunisia, opening the opportunity to private citizens to invest in solar energy with a predictable ROI and at a competitive level of earnings, also in comparison to traditional energy sources. This scheme perfectly matches our sustainability goals".
Mr. John Redpath, Public Relations Officer of Trafigura, commented: "Trafigura's strategy is to manage wind and solar portfolios while offering value added digitalized services such as virtual power plants to small and decentralized production units. Providing long term solutions for new renewable developments puts Trafigura at the forefront of the energy transition".
Ms. Kristeen Scott of Gemlan Tech, added: "This remarkable milestone marks the start of a new era of solar PV in Tunisia. Nowadays, solar PV plants can sell electricity at much lower prices than conventional power plants. This opens up an unprecedented market, independent and government-supported ".