Filed Pursuant to 17 CFR §230.253(g)(2)
File No. 024-11259
OFFERING CIRCULAR SUPPLEMENT NO. 2
Date of Original Offering Circular: August 13, 2020
September 24, 2021
Energea Portfolio 2 LLC
35 Noble Street
Brooklyn, NY 11222
(860) 316-7466
www.energea.com
This document (the "Supplement") supplements the Offering Circular of Energea Portfolio 2 LLC, (the "Company") dated August 13, 2020 (the "Offering Circular"). Unless otherwise defined in this Supplement, capitalized terms in this Supplement have the meanings given to them in the Offering Circular.
The purpose of this Supplement is to provide additional information that is not in the Offering Circular.
Change in Share Price
The price of the Class A Investor Shares has been reduced to $.77 per share from the initial offering price of $1.00 per share.
Sale of Projects
As of the date of this filing, the Company has successfully sold the following three projects:
Project Energea Itaguai III Aluguel de Equipamentos e Manutencao Ltda. ("Itaguai III"): a single purpose entity, which owns a 1MW solar project in the State of Minas Gerais.
Project Salinas Geracao S.A. ("Salinas"): a single purpose entity, which owns a 5MW solar project in the State of Minas Gerais.
Project Energea Pedrinopolis Ltda. ("Pedrinopolis"): The Company now owns and intends to develop and invest in the Project Pedrinopolis, a single purpose entity in the State of Minas Gerais, which will own a 2.25MW solar project.
Acquisition of Projects
As of the date of this filing, the Company has successfully acquired the following project:
| Pedra do Indaia |
Power Capacity | 2.25 MW AC |
Name of SPE | Energea Monte Alegre Ltda. |
State | Minas Gerais |
Location | Pedra do Indaia |
Land Status | Leased |
Customer | Consorcio de Geracao Compartilhada de Energia Eletrica Energea |
Initial Contract Term | 25 Years |
Purchase Price | $131,239 |
Estimated Equity | $2,913,720 |
Estimated Debt | N/A |
Estimated Project IRR* | 20.27% |
* We calculate the internal rate of return for the Project based on the anticipated cash flows from the Project. We assume the Project will have zero value at the expiration of the initial contract term. This is intentionally a conservative assumption. In almost all cases a Project will have some residual value, and sometimes a significant amount of residual value.
For each Project, the Manager prepares a Project Summary and Financial Memo. The Project Summary includes extensive information about the Project while the Financial Memo includes financial assumptions and estimated results of operations. The Project Summary and Financial Memo for the Pedra do Indaia Project is attached as Appendix to this Supplement:
APPENDIX
Pedra do Indaia Project Summary and Financial Memo |
Appendix 1-A
Pedra do Indaia Project Summary and Financial Memo
Pedra do Indaia PP is a 2.5 MW mini generation solar photovoltaic power plant located in the Minas Gerais State, Brazil.
This power plant will be connected to the electricity distribution grid of Cemig (utility company) as established through Normative Resolution (REN) No 492/2012 of ANEEL (National Electrical Energy Agency) with revisions given by REN no 517/2012, no 687/2015 and no 786/2017.
This solar plant will be rented to a consortium, made up of residential and commercial customers known as "subscribers," for a period of 25 years. The rental contract with the consortium allows subscribers to opt into and out of the program without penalty. In the case any subscriber does not make a payment, Energea may replace them with another subscriber from the consortium's waiting list.
The project is at Ready-to-Build with EPC scoped and priced, Interconnection secured, and Land Lease fully executed with a 25-year term.
Highlights
Project | Pedra do Indaia |
Location | Pedra do Indaia - Minas Gerais State/Brazil |
Technology | Solar Photovoltaic |
System Size (AC/DC) | 2.5 MW/3.0 MWp |
Year 1 Production (MWh) | 6089 |
Offtaker/Term | 25 years |
DevCo | Lux Energia e Participacoes Ltda. |
Acquisition Price | 675,000.00 BRL (131,245.47 USD) |
Solar EPC | 11,455,766.00 BRL (3.82 BRL/Wp) |
CapEx (All in) | 14,986,138.00 BRL (5,00 BRL/Wp) |
IRR | 20.27% |
Status | Notice to Proceed |
EPC Contractor | Alexandria Industria de Geradores S.A. |
Estimated NTP | September 14th, 2021 |
Estimated COD | April 30th, 2022 |
Funding Strategy | Equity |
Technical Analysis
Site
The project area covers a 7-hectare parcel of a 109 hectares propriety. It is located in the rural area of the Pedra do Indaia municipality with easy access from the city through a dirt-road abutting directly to the site.
The Project Area has a slight slope and will need some earthwork in order to allow the installation of a tracker-based system.
There are no reliefs or structures in the surroundings of the site, ensuring zero shading on the project. Any trees that are proven to shadow the arrays will be dully removed.
Solar resource and Energy Production
According to the SolarGis database, the Global Horizontal Irradiation on site is 1916.1 kWh/m2.year with an Average Annual Temperature of 21 °C. The combination of the high irradiance with low temperature is the perfect environment to maximize the efficiency of the PV-system.
Regarding Energy Production, the Project is estimated to produce 6089 MWh/year with a Specific Production of 2028 kWh/kWp.year. The estimated AC Capacity Factor and Performance Ratio are, respectively, 27.8% and 83.3%.
Preliminary Engineering
A Preliminary Engineering was done for the project. On the Tables below are described the general specifications of the project and of its main components.
Table 1 - PV-system main characteristics
Installed Apparent Power | 2,500 kVA |
Source | Solar |
Number of PV modules | 5,580 - 3360 x 540W and 2220 x 535W |
Maximum Power per module | 540 Wp |
Total module power (maximum) | 3,002 kWp |
Number of Electronic Power Inverters | 17 x 150 kW |
AC output power per inverter | 16 x 150 kW e 1 x 150 kW (limited to 100 kW) |
Total rated AC output power inverters | 2,500 kW |
Table 2 - Module specifications
Brand | Longi |
Model | LR5-72HBD 520~540M Bi-facial |
Maximum Power | 540 Wp |
Technology | Monocrystalline |
Numbers of cells | 144 |
Voltage at Maximum Production (Vmp) | 41.65 Vcc |
Current in Maximum Production | 12.97 A |
Size | 2256 x 1133 x 35 mm (WxHxL) |
Weight | 32.3 kg |
Energy Efficiency | 21.1 % |
Table 3 - Inverter specifications
Brand | SMA |
Model | SUNNY HIGHPOWER 150-20 |
Maximum apparent output power | 100 / 150 kVA |
Rated Output Voltage | 400 V / 600 V |
Output Voltage Range | 304 V to 447 V / 480 V to 690 V |
Maximum output current | 151 A |
Frequency | 50 Hz / 60 Hz |
Number of phases | 3 |
Maximum Efficiency | 98.8% / 99.1% |
Insulation Method | Transformerless |
Financial Analysis
We have compiled the main assumptions that drive the financial analysis within the project model and summarized them within the tables below. The resulting IRR of Pedra do Indaia stands at 20.27%, with an estimated payback of 5 years, 11 months and 17 days from NTP.
Table 4 - Revenue Assumptions
Revenue Contract Term | 25 years |
Fixed Discount on Credit Value | 15% |
Rental Revenue Price | 275,000 BRL / month |
O&M Revenue Price | Variable |
Resulting Energy Credit Rate | 714,31 BRL / MWh |
Demand Charge (TUSD rate) | 15,72 BRL / kWac |
Default Rate | 4% |
Table 5 - Tax Assumptions
PIS / COFINS on Revenue | 3,65% of Gross Revenue |
ISS on Revenue | 5% of O&M Revenue |
Tax Basis | Presumed Profit |
Taxable Income Basis | 32% of Gross Revenue |
IRPJ on Profit | 15% of Taxable Income |
Additional IRPJ on Profit (If monthly taxable income is greater than 20,000) | 10% of Taxable Income |
CSLL on Profit | 9% of Taxable Income |
IOF on Financial Transactions | 0,38% of Transferred Values |
Table 6 - Operating Expenses Assumptions
Operations & Maintenance | 6 reais per kWac | Paid by Consortium |
Land of Roof Rental | 6,679 BRL / month | Paid by Consortium |
Insurance (GL & Property) | 1,000 BRL / month | Paid by Consortium |
Banking Fees | 100 BRL / month | Paid by SPE |
Site Security | 1,000 BRL / month | Paid by Consortium |
Technical Services Reserve | 10,000 BRL / month | Paid by SPE |
Travel | 500 BRL / month | Paid by Consortium |
Utilities | 500 BRL / month | Paid by SPE |
Marketing Commission | 5% of Revenue | Paid by Consortium |
Billing and Collections (Fixed) | 7,500 BRL / month | Paid by Consortium |
Billing and Collections (Variable) | 15 BRL / MWh compensated | Paid by Consortium |
Total OpEx per Month (Average) | 68,090 BRL / month | - |
*All values readjusted with IPCA annually.
Table 7 - Capital Expenditures Assumptions
Acquisition Costs | 675,000 BRL |
Solar EPC | 11,455,766 BRL |
Interconnection | 1,350,000 BRL |
Soft Costs | 724,621 BRL |
Developer Fees | 714,571 BRL |
Pre-COD OpEx | 66,180 BRL |
Total CapEx (All-In) | 14,986,138 BRL |