Solair in Spain After the InfraRed Deal Collapse: Enhancement, Storage, or Longer Risk?

Two Months That Changed Spain

The main article argued that 2026 is still a funding-proof year for Solair. Spain is where that thesis changed shape the fastest. Between January 27, 2026 and March 26, 2026, four things happened in sequence: the PPA was reassigned to Sancho, Calasparra received commercial-operation approval and connected to the grid, Sancho’s financing agreement was signed, and then the InfraRed deal was not completed.

That is not a technical sequence. It is a switch from one capital-allocation model to another. What was supposed to be a disposal-and-recycling move turned overnight into a different path: keep the assets, add storage, and perhaps sell later at a different price. This was not only a delayed deal. It was a replacement of the capital-recycling logic itself.

So this follow-up does not ask whether Spain is good or bad. It asks a narrower question: after the sale path broke, is the enhancement and storage economics strong enough to justify holding longer, or did Solair simply extend the duration of the risk.

What Actually Broke With InfraRed

Throughout 2025 and into early 2026, Spain was framed partly through the sale path. The original proposal referred to the sale of three Spanish projects, Alizarsun, Calasparra, and Villena, for total expected consideration of about EUR 80 million. During 2025, binding sale agreements were signed for Alizarsun and Calasparra, and later the process was expanded into negotiations on another project as well.

But the March 26, 2026 notice changes the read completely. The company did not say the buyer walked away from an unfinished asset, and it did not say the problem was basic project quality. It said explicitly that the gap between the parties was the pricing of the third project and the structure of future premiums payable to the company, premiums that depended on enhancing the projects by adding storage systems. That is the core of the story.

If the disagreement sits on future storage-linked premiums, then the real argument is no longer about the value of a plain PV project. It is about who gets the next layer of value, the developer who holds longer or the buyer who arrives before the enhancement. This stopped being a simple exit transaction. It became a dispute over how the hybrid-storage upside should be divided.

That point matters even more because by the time the deal collapsed, Calasparra had already satisfied one of the material conditions precedent for closing. On February 5, 2026 it connected to the grid and received commercial-operation approval. In other words, the disposal did not fail because the project stayed immature. It failed after one of the assets had already crossed into production.

To understand why the storage layer became so important, the Spain chapter of the annual report also matters. There, the company describes 2025 as a year in which Spanish market conditions and regulation increasingly rewarded hybrid assets. Daily price spreads in Spain reached as high as EUR 94 per MWh in 2025. The Spanish government set a target of about 22.5 GW of storage by 2030, launched a EUR 750 million storage-subsidy program during 2025, and after the Iberian blackout advanced measures that recognize storage as utility-network infrastructure, exempt hybrid storage in already-approved polygons from a new environmental approval, and give hybrid projects higher priority in dispatch.

The implication is straightforward: the company did not walk away from a sale in order to keep the same assets unchanged. It chose to keep assets whose economics can change materially once storage is added.

The Enhancement Case Is Already Numerical

This is where the Spain thesis becomes tangible. For the two operating assets at the center of the failed disposal, Alizarsun and Calasparra, the company has already published both a current base and a post-storage enhancement case.

In the annual report, Alizarsun is shown with expected annual revenue of about NIS 11 million, EBITDA of about NIS 7 million, and FFO of about NIS 5 million. Calasparra appears there with expected annual revenue of about NIS 11 million, EBITDA of about NIS 7 million, and FFO of about NIS 4 million. In the February 6 connection notice, once Calasparra had received commercial-operation approval, the company already presented a somewhat stronger base for it, about NIS 12 million of annual revenue, about NIS 9 million of EBITDA, and about NIS 5 million of FFO.

On top of that base comes the InfraRed cancellation notice. The company estimates a storage addition of about 160 MWh for Alizarsun and about 100 MWh for Calasparra during the coming year. After storage, the expected full-year run-rate rises to about NIS 41 million of revenue, NIS 32 million of EBITDA, and NIS 24 million of FFO at Alizarsun, and about NIS 29 million of revenue, NIS 24 million of EBITDA, and NIS 16 million of FFO at Calasparra.

That is not cosmetic. At Alizarsun, expected annual FFO nearly quintuples. At Calasparra, even if the updated commercial-operation notice is used as the base instead of the annual-report table, the uplift after storage is still substantial. Once the sale failed, Spain stopped being a story of "why the assets were not sold" and became a story of "whether the enhancement economics really justify staying."

The company is not hiding what it is trying to do. In the cancellation notice it says explicitly that it has been working to enhance this project cluster by adding storage, and for part of the portfolio also through repowering steps. The asset being held after March 2026 is therefore not static. It is a platform the company is trying to move up one level.

Sancho Changes The Debate

The reason holding Spain does not currently look like a blind jump into risk is Sancho. If March 2026 had only left Solair with Alizarsun and Calasparra, the obvious reading would have been that the company simply got stuck with two assets after its exit plan failed. But in January and February 2026, Sancho picked up the two layers that force a different interpretation: a signed revenue contract and signed financing.

In the annual report, Sancho appears as a project under construction with about 100 MW of capacity, expected total cost of about NIS 237 million, and expected commercial operation in 2026. On January 27, 2026 the binding agreement to reassign the PPA from Mequinenza to Sancho was signed. The company estimated revenue during the PPA period at about EUR 70 million and cumulative revenue over the project’s life at about EUR 348 million.

But here again, storage is the part that changes the answer. The company plans to add about 360 MWh of storage to Sancho, at an estimated total cost of about EUR 32 million, starting from the project’s third year of commercial operation. After that addition, estimated revenue during the PPA period rises to about EUR 90 million and estimated lifetime revenue rises to about EUR 417 million.

This matters for more than the revenue lines. According to the February 12, 2026 HTML notice, Sancho’s senior financing agreement was already signed in final form. And in the Spain project table in the annual report, Sancho is presented with construction financing from the Austrian bank. That means Spain at the end of the first quarter of 2026 is no longer just two connected assets waiting for a sell-or-hold decision. It also includes a 100 MW project that already has both a PPA and financing.

That is what makes the hold case more serious. If Calasparra is already connected and Sancho is already financed, Spain can start to be built as a broader FFO layer, not only as an inventory for sale. But it also means the company is choosing to keep the execution period and part of the capital burden inside the group for longer.

The Three Real Paths

After the InfraRed deal collapsed, Spain effectively sits on three possible paths. None of them is implausible. None of them is cost-free.

Path One: Sell Later, But At A Different Price

This is the path the company seems to be signaling. Hold longer, add storage, enhance the assets, and then sell once the developer premium is supported by both operations and supportive regulation. If that works, Solair may capture a premium it did not want to give away in March 2026.

The practical friction is obvious: the enhancement has not happened yet. It is planned for the coming year. Any delay in storage installation or in realizing the higher asset value also delays the improved monetization window.

Path Two: Hold And Operate

This is the quieter path, but it is real. If Alizarsun and Calasparra do move to a materially higher FFO layer after storage, and if Sancho connects on schedule, Spain can start to look like a small private-power platform with recurring FFO, not just a development-and-disposal cluster.

The advantage here is business quality. The company does not sell the upside too early, and it also starts building a generation base that can carry more of the corporate overhead and financing burden. The drawback is that capital remains tied up inside Spain for longer.

Path Three: Longer Risk

This is the path the market should worry about most. Not because Spain is weak, but because the group does not live only in Spain. At the end of January 2026, Calbuco in Chile received a memorandum of understanding for senior financing of up to USD 65 million, but its draw conditions require, among other things, equity and shareholder loans of at least 35% of project cost. In other words, outside Spain too there are parallel layers that require real capital.

That is why the failed InfraRed transaction is not just Spanish news. It is also group-level capital-recycling news. If Spain does not soon produce either a better monetization event or a materially larger FFO layer, it can shift from a value pool waiting for a premium into a portfolio that keeps absorbing capital just when Chile and other projects are also pulling on it.

Conclusion

The failed InfraRed transaction did not turn Spain into a negative story. It simply raised the burden of proof. As long as Calasparra is already connected, Sancho is already financed, and the company is publishing sharp storage-enhancement economics, Solair has a credible basis for arguing that staying with the assets can create more value than selling quickly.

But the right to wait only has value if it actually creates more value before the group needs the capital elsewhere. That is why the next checkpoints are very clear: storage installation at Alizarsun and Calasparra over the coming year, Sancho staying on its 2026 timeline, a clear decision on whether Spain is being built as an FFO platform or returned to a sale track, and the company’s ability to do all of that without Spain turning into a capital competitor against Calbuco and other group projects.

The right thesis for now is that Spain is no longer just a sale queue. It is an enhancement platform. If the enhancement happens, the March 2026 cancellation may eventually look like a refusal to sell too early. If it does not, it will look like a move that extended the duration of risk exactly when Solair’s capital is needed in more than one place.