The British company Welink Energy Portugal 2 UK Limited, which controls the largest operational solar power plant in Portugal, has entered insolvency, Negócios reports.

The Alcoutim plant, located in the Algarve, has been operational since 2021. It has a capacity of 220 megawatts (MW), but an output lower than expected, combined with a drop in wholesale electricity prices in the Iberian market, has reduced the project’s revenues.

Preparing for sale

A BDO report states that the next steps will focus on improving the plant’s performance, while preparing the asset for sale to new investors.

Management of the plant has been transferred from Welink Investments to Exus, which, in collaboration with Enertis, will assess the investment required to boost production.

The main creditors, Investec and Kommunalcredit Austria, hold an exposure of approximately €64 million.

Technical troubles

The plant has encountered several fires and technical issues, along with a dispute with the Chinese company CTIEC, which was responsible for the plant’s construction.

According to the report cited by Expresso, the contractor is claiming a sum amounting to €143 million and is the subject of arbitration proceedings.

Welink intends to combine the project with wind power and storage, but the wind component is still awaiting a decision from the Portuguese Environment Agency.