Wind power is blowing back against a fifth year of contracting Greek
credit as banks keep funding renewable energy projects that deliver
secure cash flows.
Greek banks are preparing to finance as much as 1.3 GW of new wind
power even as their lending to companies shrank for a 58th-straight
month in April, according to Norton Rose Fulbright LLP, a law firm
advising on deals. Even as the country’s debt crisis forced lenders to
plug a 14.4 billion-euro ($16.1 billion) hole in their balance sheets,
renewable wind energy has remained attractive for investment banks and
developers.
“It’s the only sector that never suffered a slowdown even though
we’ve had the difficulties,” said Ellie Kakoullou, head of structured
finance at Alpha Bank AE in Athens. “The one sector that the banks have
continually financed post-Lehman, through the Greek crisis and today as
well, is the wind energy sector.”
Clean energy is being prioritized in Greece, where the economy shrank
0.4 percent in the first quarter and businesses are still groping for
stability after six years of political and economic turmoil. The energy
ministry has guaranteed renewable generators that all of the power they
supply will be bought. Even as consumption slumped with the economy,
clean energy plants are still running at full capacity.
“It was the first industry with a project finance structure so the
banks know it and feel comfortable in this industry,” according to
Dimitris Assimakis, partner at Norton Rose Fulbright. “There’s not so
much else to do in Greece in terms of project finance. The banks want to
earmark all the funds they got from the recapitalization to sectors of
economy with a productive effect.
Up to 50
wind projects
with a combined capacity of 1.3 GW are under development in Greece and
have to be commissioned by March 2018 in order to lock in government
contracted feed-in tariffs, according to Assimakis. It may cost as much
as $2 billion if they are all built, according to Bloomberg New Energy
Finance.
Alpha Bank, Eurobank Ergasias SA and the National Bank of Greece are
financing Athens-based developer Terna Energy SA’s wind park with 120
million euros of debt to go along with 60 million euros of equity,
according to Terna spokesman Konstantinos Lamprou. The St. George
facility will have an installed capacity of 73 MW once complete in the
third quarter.
There are three other wind projects with planned capacities over 100
MW expected to reach financial close by early next year, according to
Alpha Bank’s Kakoullou, who said her lender has also allocated as much
as 250 million euros for smaller-sized projects.
“It’s one of the most attractive and safe sectors to finance. The
risk profile is very strong, there’s good credit and large players,”
Kakoullou said by phone. “It’s booming and will be for the next five to
10 years.”
Eurobank will probably lend around 100 million euros to wind projects
in 2016, according to Yiannis Saratsis, head of project finance. He’s
working on two to three “very big” deals that are expected to reach
financial close before the end of the year.
It’s unlikely that developers will build all 1.3 GW of contracted
projects as loan maturities shrink and banks raise their expectations
for equity participation to 30 percent from 20 percent, Saratsis said.
“Getting finance now isn’t as easy as it was in 2010” for developers
“with a wind capacity that is not excellent or a sponsor that doesn’t
have that much equity to spend,” he said.
Development banks such as the European Bank for Reconstruction and
Development and the European Investment Bank are also getting involved
in Greek clean energy deals.
“We understand that Greek banks are still actively financing
renewables projects in Greece and we will also be happy to work
alongside them,” said Sabina Dziurman, EBRD regional director. The
London-based development bank started operating in Greece last February
after a request from the authorities in Athens.
Greece’s government is also working on new guidelines that is likely
to boost investment by shifting from feed-in tariffs to feed-in premiums
set by competitive auctions, according to Assimakis, who expects the
new program to be implemented by July. Projects that already have power
purchase agreements will be grandfathered from the previous program.
source: http://www.renewableenergyworld.com
The International Renewable Energy Agency (IRENA) has published a new report. “Renewable Energy and Jobs – Annual Review” presents the status of renewable energy employment, both by technology and in selected countries.
