Leclanché — Construction commenced on St. Kitts project

Leclanché (SW: LECN)

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Leclanché — Construction commenced on St. Kitts project

Leclanché has announced that construction has begun on the St. Kitts project. This project consists of a fully integrated 35.7MW solar farm and 45.7MWh battery storage facility deploying Leclanché’s proprietary energy management system software. The project will be the largest in the Caribbean and Leclanché’s largest project so far. It will also be the first project where Leclanché adopts a build, own and operate (BOO) model. Our estimates remain under review until there is greater clarity on the business reorganisation outlined in our October note.

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Construction commenced on St. Kitts project

Project update

Alternative energy

14 December 2020



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Net debt (CHFm) at end June 20 (including CHF54.0m convertible debt and CHF4.1m IFRS 16 lease liabilities)


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Business description

Leclanché is a fully vertically integrated energy storage solution provider. It delivers a wide range of energy storage solutions for homes, small offices, large industries and electricity grids, as well as hybridisation for mass transport systems such as bus fleets and ferries.


Anne Margaret Crow

+44 (0)20 3077 5700

Leclanché is a research client of Edison Investment Research Limited

Leclanché has announced that construction has begun on the St. Kitts project. This project consists of a fully integrated 35.7MW solar farm and 45.7MWh battery storage facility deploying Leclanché’s proprietary energy management system software. The project will be the largest in the Caribbean and Leclanché’s largest project so far. It will also be the first project where Leclanché adopts a build, own and operate (BOO) model. Our estimates remain under review until there is greater clarity on the business reorganisation outlined in our October note.

Year end

Revenue (CHFm)




























Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Renewables account for only 5–6% of the electricity produced on the island of St. Kitts, making it heavily reliant on imported fossil fuel, especially diesel, for power generation. The government is keen to reduce this dependence as global oil price fluctuations directly affect the cost of power, thus affecting household disposable incomes and GDP. It has approved the allocation of land for the project site and, through the state-owned utility SKELEC, signed a 20-year power purchase agreement. The project should reduce diesel use by 30–35%, saving money and cutting carbon emissions by more than 740,000 tonnes over 20 years, which is equivalent to the emissions from 8,000 passenger vehicles. Once completed, the new project will provide 30–35% of the island’s existing power-generation requirements.

Leclanché is forming a separate holding company that will own the St Kitts solar farm and energy storage facility and other BOO developments that have already been identified. Leclanché will own the majority stake in the holding company and is securing equity finance and a construction loan from external investors. Management expects this holding company will generate c CHF5m in annual EBITDA from the St Kitts project for a 20-year period from 2022.

The shift to a BOO model had an adverse impact on FY19 performance, which showed a year-on-year revenue drop of CHF32.4m. Had Leclanché gone ahead with construction on the St. Kitts project on a build, own, operate, transfer (BOOT) basis in 2019, as it had originally planned, management estimates this would have enabled the group to recognise another CHF50m of revenues, giving year-on-year revenue growth during FY19. However, the move makes the group less exposed to yearly variations in revenue associated with the completion of individual projects.

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