financing wind energy in cee
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Financing Wind Energy in CEE. Grzegorz Zielinski, EBRD EWEC 2010 Warsaw , 21 April 20 10. Agenda. What is EBRD? EBRD Financing Capabilities Financing Terms and Due Diligence Recent RE deals in CEE More on Current Pricing and Off-takes Contacts. 1. What is EBRD?. - PowerPoint PPT PresentationTRANSCRIPT
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Financing Wind Energy in CEEFinancing Wind Energy in CEE
Grzegorz Zielinski, EBRDGrzegorz Zielinski, EBRD
EWEC 2010 EWEC 2010 WarsawWarsaw, , 21 April21 April 20 201010
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AgendaAgenda
1. What is EBRD?
2. EBRD Financing Capabilities
3. Financing Terms and Due Diligence
4. Recent RE deals in CEE
5. More on Current Pricing and Off-takes
6. Contacts
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1. What is EBRD?1. What is EBRD?
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What is the EBRD?What is the EBRD?
AAA-rated international financial institution, promotes transition to market economies countries from central Europe to central Asia
Owned by 61 countries and two inter-governmental institutions
Asset base: approx. 2,500 transactions worth €50 bn signed through 2009
Capital base: €20 bn dedicated exclusively to the region
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EBRD: EBRD: Regional LeaderRegional Leader
A network of 33 offices in 30 countries
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Strong commitment to the regionStrong commitment to the region
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EBRD: EBRD: Foundations of OperationsFoundations of Operations
Apply sound banking principles to all projects
– We do not subsidize
Advance the transition to a full market economy
– Priority to promote private sector involvement and market expansion
Support, but not replace, private investor: additionality
– Act as a catalyst for higher and riskier involvement of financiers
Achieve environmentally sound and sustainable development
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2. EBRD Financing Capabilities2. EBRD Financing Capabilities
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EBRD FacilitiesEBRD Facilities
EquityEquity
Project finance loan
Corporate loan with specified use of proceeds
Hard/local currency
Medium and long tenors (up to 15 years)
Floating/fixed rates
Carbon finance
Common stock or preferred
Quasi-equity
LoansLoans
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EBRD: EBRD: Country Specific Value AddedCountry Specific Value Added
Regional expertise means key structuring skills
Good relationship with Governments, regulators
EBRD positioning as a neutral party
Mitigation of political and regulatory risks
Access to policy dialogue
Strong local presence
Catalyst to access additional equity, debt and trade finance Risk sharing through equity participation
Flexible deal structures
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3. Financing Terms and Due Diligence3. Financing Terms and Due Diligence
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EBRD Debt FinancingEBRD Debt Financing
Key Terms and Conditions: Tenor - 10-15 years Margin - benchmarked to market Fixed rate possible Secured on Project Assets Quality off-take EBRD can directly finance up to
35% of total project costs
(additional funds mobilised
through syndication) For project finance loans, at least
30% of total project costs to be
contributed by sponsor equity Portfolio financing
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EBRD Equity FinancingEBRD Equity Financing
Key Features:
EBRD equity stake typically at
around 20-25% (meaningful, but
minority)
Investment trough capital
increase
Invest in Funds to address
smaller projects or larger stakes
Exit through IPO, trade sale or
put/call agreement
Key Requirements: Nomination of at least one
director to the Board but not
actively engaged in
management Shareholders agreement Share subscription agreement
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Wind Farm Due Diligence RequirementsWind Farm Due Diligence Requirements
Technical
Feasibility StudyEPC / O&M ArrangementsGrid ConnectionWind Study
Price ProjectionsSupply/Demand Balance
Environment / Social
ESIAStakeholder EngagementEU+
Market
Financial ModelOfftake ArrangementsSponsor Information and Experience
Legal
Project Permits/LicensesSponsor InformationRenewable Energy Legislation
Financial
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CEECEE: : current statuscurrent status
Poland – many local and international developers, matured GC market, 2017 question
Hungary – tight market limited by terms of operating licenses, 2nd tender still o/s Slovakia – not much success Baltics – good potential with several small and mid size projects now under
construction Croatia – government supportive, 12-year feed-in tariff, some local and
International activity Bulgaria – attractive market, supportive government, re-thinking regulatory
approach and several large projects Romania – large market, large deals Ukraine – very large potential, renewable energy framework approved in October
2008, but good secondary legislation still pending
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CEECEE : : In practiceIn practice
Some legislative gaps: e.g. Estonia has set low feed in tariff caps, but is revising its position
Licensing issues: e.g. Hungary wanted to limit amount of wind energy to enter market so trimmed down size and economics of qualifying projects making some uneconomic
Long term contracts: e.g. Polish disco’s in oligopolistic market for long term green certificate offtakes
“Many developers, many financiers, increasing number of constructed projects”
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44. Recent . Recent RE RE dealsdeals in CEE in CEE
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EBRD: Wind Farms FinancedEBRD: Wind Farms Financed
Bulgaria
Turkey
Poland
- St. Nikola 156 MW
- Suvorovo 60 MW
Project
Hungary
Estonia
EBRD InvestmentSponsor Debt Equity
- AES
- Grupo Enhol
- EUR 70 mln
- EUR 60 mln
- Raisner OU 130 MW - Iberdrola Renovables - EUR 0.9 mln
- Wind farm portfolio - Iberdrola Renovables - EUR 50 mln
- Tychowo 50 MW
- Wind farm portfolio
- Global RPI
- Iberdrola Renovables
- EUR 30 mln (in PLN)
- EUR 75 mln (in PLN)
- Rotor 135 MW - Zorlu Enerji - EUR 45 mln
Regional- Enercap RE Fund
- FreEnergy
- Various
- Nelja Energia
- EUR 25 mln
- EUR 19 mln
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EBRD: EBRD: RecentRecent RE deals RE deals
Saint Nicholas Wind Farm – Bulgaria (October 2008)– Construction and operation of a 156MW wind farm in the Kavarna region – Financing: EUR 90 million of long-term debt– Sponsor: AES GEO Energy Ltd
Iberdrola Estonia Wind – Estonia (November 2008)– Development of the 150MW Lüganuse Windfarm project located
approximately 120 km east of Tallinn, and close to the Baltic Sea shore – Financing: EBRD provided EUR 900,000 of development equity
Tychowo Wind Farm – Poland (April 2009)– Construction and operation of a 50MW wind farm in Northern Poland– Financing: long-term debt financing of PLN 126 million– Sponsor: RP Global of Spain
Rotor Wind Farm – Turkey (May 2009)– Construction and operation of a 135 MW project in Southern Turkey– Financing: EUR 45 million of long-term debt– Sponsor: Zorlu Elektrik Uretim A.S.(Zorlu Enerji)
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EBRD: EBRD: Recent RE dealsRecent RE deals
FreEnergy – Estonia (June 2009)– Equity investment in the portfolio of 15 wind farm projects located across
the Baltic States.– Financing: EUR 18.8 million equity– Co-investor: founders and initial investors in FreEnergy
Suvorovo Wind Farm – Bulgaria (January 2010)– Construction of a 60 MW wind farm – second largest after St Nikola
project– Total debt finance: EUR 71 million senior debt provided by EBRD,
BSTDB and UniCredit with a 15 year tenor (A loan) and 12.5 year tenor (B loan)
– Total project cost EUR 108 million, Enhol Group provided 31% as equity
Iberdrola Equity – Poland and Hungary (February 2010)– EUR 125 million acquisition of 25% equity stake in Iberdrola’s Polish and
Hungarian wind farm portfolio
Seven more wind farm projects to be financed in the next 6 months
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5. More on Current Pricing5. More on Current Pricing and and Off-takes Off-takes
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Long Term DebtLong Term Debt
Q1 2008 Q1 2009 Now
15-18 yrs 5-10 yrs 12-15 yrs C.S.
80/20 70/30 70/30
100-130bps 300-500bps 300-390bps
70-100bps Up to 200bps 150-180bps
local Euro local/Euro
… at what price?
Shorter tenors
Lower leverage
Higher margins
Higher FEF
Currency
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Off-takesOff-takes
In Poland and Romania
– Long-term and fixed-price - covering both, electricity and GC
– Semi merchant - e.g. mid-term GC/electricity off-takes, higher revenues vs. lower leverage
– Fully merchant - very few in EU15 and North America, hopefully one day in CEE (full CO2 pricing in place)
Other CEE countries with feed-in tariff
– Merchant tail
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66. Contact details. Contact details
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How to contact usHow to contact us
Grzegorz Zielinski
Senior Banker,Renewable Energy & CEE Coordinator
+48225205700
WFC, E. Plater 53, 00-113 Warsaw, Poland
www.ebrd.com
www.ebrdrenewables.com
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Thank YouThank You