Ellomay Capital Ltd. Announces the Execution of an Agreement to sell 49% of its Italian Solar Portfolio of 198 MW to Clal Insurance, a Leading Israeli Institutional Investor

Rhea-AI Summary

Ellomay Capital (NYSE American; TASE: ELLO) has entered into an investment agreement with Clal Insurance, a leading Israeli institutional investor, for a €52 million investment. The deal involves creating an Israeli partnership where Ellomay will hold 51% and Clal 49% of the interests in a 198 MW Italian Solar Portfolio.

The portfolio includes 38 MW of operational solar facilities and 160 MW of Ready-to-Build projects. The agreement grants Clal first-look rights on future Ellomay solar projects in Italy. As part of the deal, Ellomay will issue Clal a warrant for 416,000 ordinary shares at NIS 69.7 per share, exercisable within 26 months.

The partnership agreement includes management fees for Ellomay, pro-rata funding commitments, and semi-annual surplus distributions. The deal's completion is subject to regulatory approvals and other customary conditions.

Positive

• €52 million capital injection from major institutional investor
• Maintains 51% controlling interest while monetizing 49% of assets
• Partnership structure includes ongoing management fees for Ellomay
• Large portfolio of 198 MW combining operational and Ready-to-Build projects
• Project finance agreements already secured in March 2025

Negative

• Deal completion subject to regulatory approvals and conditions
• Potential share dilution from warrant exercise
• Future funding commitments required for development

Insights

Financial Analyst

Ellomay's €52 million deal with Clal Insurance represents a significant financial milestone that strengthens the company's position in multiple ways. By selling a 49% stake in its 198 MW Italian solar portfolio while retaining majority control (51%), Ellomay has effectively monetized assets while preserving operational control and future upside.

The transaction structure is particularly favorable. Ellomay maintains general partner status in the Israeli LP, secures annual management fees, and creates a balanced governance framework. The company has already fulfilled its funding commitments to the portfolio, while Clal will provide its pro-rata portion of future development costs - effectively reducing Ellomay's capital burden going forward.

The 198 MW portfolio's composition is noteworthy: 38 MW of operational assets plus 160 MW of Ready-to-Build projects with EPC agreements already in place. Project finance arrangements were secured in March 2025, indicating the portfolio's bankability and reducing execution risk.

Perhaps most strategically valuable is the right-of-first-look mechanism for future Italian solar projects, creating a potential funding pathway for Ellomay's development pipeline. This reduces future capital raising uncertainty and validates their development approach.

The warrant issuance (416,000 shares at approximately $18.5/share) creates additional potential value and aligns interests between both parties, though its 26-month term and cashless exercise provisions limit immediate dilution concerns.

Renewable Energy Specialist

This partnership with Clal represents more than just financial engineering - it's a strategic validation of Ellomay's renewable development capabilities and portfolio quality. The transaction's €52 million valuation for a 49% stake implies a substantial premium to book value, reflecting the intrinsic value of developed solar assets in the current European energy landscape.

The 198 MW Italian portfolio represents meaningful scale in the fragmented European solar market. The mix of 38 MW operational and 160 MW Ready-to-Build assets creates a balanced risk profile - immediate cash flow combined with near-term growth. Having secured both EPC agreements and project financing indicates the portfolio has cleared major development hurdles.

Italy's regulatory environment for renewables has stabilized following previous incentive scheme reforms, and the country's resource quality (solar irradiation) ranks among Europe's best. Northern Italy's grid infrastructure, while congested in some regions, generally supports large-scale solar development.

The structured partnership approach demonstrates maturity in Ellomay's business model, transitioning from pure development toward asset management and portfolio optimization. The semi-annual distribution mechanism (following repayment of partner loans) creates visibility on future cash flows while the management fee structure allows Ellomay to monetize their operational expertise.

The first-look rights mechanism for future Italian projects creates a potential competitive advantage in securing development capital in a market where financing remains the primary constraint to growth.

Tel-Aviv, Israel, April 09, 2025 (GLOBE NEWSWIRE) -- Ellomay Capital Ltd. (NYSE American; TASE: ELLO) (“Ellomay” or the “Company”), a renewable energy and power generator and developer of renewable energy and power projects in Europe, USA and Israel, today announced that it entered into an investment agreement (the “Clal Agreement”) with Clal Insurance Ltd., a leading Israeli institutional investor, and several of its affiliates (together, “Clal”), for an aggregate investment by Clal of approximately €52 million.

Pursuant to the Clal Agreement, Clal and Ellomay will set up a new Israeli limited partnership (the “Israeli LP”) in which an entity wholly-owned by Ellomay will be the general partner and Ellomay will hold 51% of the limited partner interests and Clal will hold the remaining 49%. The Israeli LP will wholly-own a newly founded Luxembourg entity, to which Ellomay’s wholly-owned subsidiary, Ellomay Luxembourg Holdings, S.à.r.l. (“Ellomay Luxembourg”), will transfer all of the issued and outstanding shares of seven Italian project companies, who hold a solar portfolio in an aggregate capacity of approximately 198 MW (the “Italian Solar Portfolio”). The Italian Solar Portfolio consists of (a) solar facilities with an aggregate capacity of 38 MW that are connected to the grid and operating and (b) additional solar facilities with an aggregate capacity of 160 MW that have reached Ready-to-Build status and with respect to which Engineering, Procurement and Construction agreements were executed. Project finance agreements were executed with respect to the Italian Solar Portfolio in March 2025.

The Clal Agreement includes customary representations and warranties of Ellomay and Clal and an indemnification mechanism for breaches of representations, warranties and undertakings, subject to customary caps and limitations, as a sole remedy, subject to customary exceptions. The Clal Agreement provides Clal with a right of first look commencing with the consummation of the transactions contemplated by the Clal Agreement with respect to investment in other solar projects currently developed or that will be developed by Ellomay and its subsidiaries in Italy for an investment under similar terms as the Clal Agreement, mutatis mutandis. Pursuant to the right of first look mechanism, Ellomay will provide Clal certain information with respect to each project that has reached Ready-to-Build status and Ellomay decided to advance its construction, and Clal will have a few months to notify Ellomay that it is interested in investing up to 49% in such projects or any portion thereof upon the terms set forth in the notice provided to Clal by Ellomay.

The Clal Agreement provides that upon consummation of the transactions contemplated by the Clal Agreement, Ellomay and Clal will sign a partners agreement (the “Clal PA”) and Ellomay will issue Clal a warrant (the “Clal Warrant”).

The Clal PA sets forth the relationship between the general partner and the limited partners, the governance and management of the Israeli LP, the funding and financing of the Israeli LP and the mechanism for future transfers of interests in the Israeli LP. Pursuant to the Clal PA, Clal undertakes to provide its pro rata portion of the amounts required for the development of the Italian Solar Portfolio to the Israeli LP, which in turn will fund the Luxembourg subsidiary and the Italian project companies. Ellomay’s aggregate funding commitment in the Italian Solar Portfolio has already been provided by Ellomay. The Clal PA also provides for the payment of annual management fees to Ellomay. The Clal PA provides each limited partner with customary rights, including a full tag-along right in the event of a change in control of Ellomay and includes customary veto rights. The Clal PA provides that following repayment of partners’ loans, the Israeli LP’s surpluses will be distributed to the limited partners, pro rata to their holdings, on a semi-annual basis, subject to maintaining the working capital required by the Israeli LP for the two following quarters.

The Clal Warrant covers 416,000 ordinary shares of Ellomay, with an exercise price of NIS 69.7 (approximately $18.5) per share. The Clal Warrant is for a term of twenty-six months and may only be exercised on a cashless basis. In the event Ellomay’s shares are traded at a price higher than NIS 80 (approximately $21.2) per share when the Clal Warrant is exercised, Ellomay, at its discretion, may choose to issue shares on a cashless basis assuming a market price per share of NIS 80 and pay Clal the remainder in cash. 

The consummation of the transactions contemplated by the Clal Agreement is subject to the fulfillment or waiver of several customary conditions to closing, including receipt of regulatory approvals, that are not entirely within the control of Ellomay, Ellomay Luxembourg, Clal or the Israeli LP. There can be no assurance as to whether or when the conditions to closing will be satisfied.

Ran Fridrich, CEO and a board member of Ellomay, commented: “Ellomay is pleased to announce the establishment of a partnership with Clal Insurance, which will invest in a 198 MW solar portfolio in central and northern Italy. The Company sees great importance in the entry of a quality institutional investor as a partner to part of its Italian solar portfolio, and in Clal’s interest in examining participation in the future in building the remainder of the Company’s Italian portfolio and views this as a vote of confidence in the Company, its management and its operations. The Company thanks the investment team of Clal, led by Barak Bensky, for their professional work in a complex cross-border transaction.”

About Ellomay Capital Ltd.

Ellomay is an Israeli based company whose shares are registered with the NYSE American and with the Tel Aviv Stock Exchange under the trading symbol “ELLO”. Since 2009, Ellomay focuses its business in the renewable energy and power sectors in Europe, USA and Israel.

To date, Ellomay has evaluated numerous opportunities and invested significant funds in the renewable, clean energy and natural resources industries in Israel, Italy, Spain, the Netherlands and Texas, USA, including:

	●	Approximately 335.9 MW of operating solar power plants in Spain (including a 300 MW solar plant in owned by Talasol, which is 51% owned by the Company) and approximately 38 MW of operating solar power plants in Italy;
	●	9.375% indirect interest in Dorad Energy Ltd., which owns and operates one of Israel’s largest private power plants with production capacity of approximately 850MW, representing about 6%-8% of Israel’s total current electricity consumption;
	●	Groen Gas Goor B.V., Groen Gas Oude-Tonge B.V. and Groen Gas Gelderland B.V., project companies operating anaerobic digestion plants in the Netherlands, with a green gas production capacity of approximately 3 million, 3.8 million and 9.5 million Nm3 per year, respectively;
	●	83.333% of Ellomay Pumped Storage (2014) Ltd., which is involved in a project to construct a 156 MW pumped storage hydro power plant in the Manara Cliff, Israel;
	●	Solar projects in Italy with an aggregate capacity of 294 MW that have reached “ready to build” status; and
	●	Solar projects in the Dallas Metropolitan area, Texas, USA with an aggregate capacity of approximately 27 MW that are placed in service and in process of connection to the grid and additional 22 MW are under construction.

For more information about Ellomay, visit http://www.ellomay.com.

Information Relating to Forward-Looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties, including statements that are based on the current expectations and assumptions of the Company’s management. All statements, other than statements of historical facts, included in this press release regarding the Company’s plans and objectives, expectations and assumptions of management are forward-looking statements. The use of certain words, including the words “estimate,” “project,” “intend,” “expect,” “believe” and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company may not actually achieve the plans, intentions or expectations disclosed in the forward-looking statements and you should not place undue reliance on the Company’s forward-looking statements. Various important factors could cause actual results or events to differ materially from those that may be expressed or implied by the Company’s forward-looking statements, including the inability to fulfill all of the conditions to closing set forth in the Clal Agreement, changes in the market price of the Company’s shares, changes in electricity prices and demand, regulatory changes increases in interest rates and inflation, changes in the supply and prices of resources required for the operation of the Company’s facilities (such as waste and natural gas) and in the price of oil, the impact of the war and hostilities in Israel and Gaza, the impact of the continued military conflict between Russia and Ukraine, technical and other disruptions in the operations or construction of the power plants owned by the Company and general market, political and economic conditions in the countries in which the Company operates, including Israel, Spain, Italy and the United States. These and other risks and uncertainties associated with the Company’s business are described in greater detail in the filings the Company makes from time to time with Securities and Exchange Commission, including its Annual Report on Form 20-F. The forward-looking statements are made as of this date and the Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:
Kalia Rubenbach (Weintraub)
CFO
Tel: +972 (3) 797-1111
Email: hilai@ellomay.com

FAQ

What is the size and structure of Clal's investment in ELLO's Italian solar portfolio?

Clal is investing €52 million for a 49% stake in Ellomay's 198 MW Italian solar portfolio through a new Israeli partnership.

How many operational vs. Ready-to-Build solar facilities are in ELLO's Italian portfolio?

The portfolio consists of 38 MW of operational solar facilities and 160 MW of Ready-to-Build projects.

What are the terms of the warrant issued to Clal as part of the ELLO agreement?

Clal receives a 26-month warrant for 416,000 shares at NIS 69.7 per share, exercisable on a cashless basis.

What rights does Clal receive regarding future ELLO solar projects in Italy?

Clal gets first-look rights to invest up to 49% in future Ellomay solar projects in Italy under similar terms.

How will profits be distributed in the ELLO-Clal partnership?

After repaying partner loans, surpluses will be distributed semi-annually to partners pro-rata to their holdings, maintaining working capital for two quarters.