Financing of unprecedented €1 billion built-to-sell construction facility including one of the biggest loans ever granted by the EIB under a project finance structure.
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Aquila Clean Energy EMEA, Aquila Capital’s clean energy development platform in Europe, has finalised a €1 billion construction facility supported by the InvestEU programme.
The financing will support the development and construction of Aquila Clean Energy’s renewable energy pipeline in Spain and Portugal over the next three years.
The projects will be implemented in the regions of Castilla y León, Comunidad Valenciana, AndalucÃa, Cantabria, Castilla-La Mancha and Murcia in Spain, and Setúbal, Coimbra, Evora and Leiria in Portugal.
The pipeline consists of more than 50 projects of predominately solar photovoltaics (PV) and onshore wind assets, with a total electricity generation capacity of 2.6 gigawatts (GW), a volume equivalent to the annual consumption of around 1.4 million households.
These projects will have an estimated yield of 5.3 terawatt hours per year.
The operation is in line with the European Union’s renewable energy targets and supports Spain and Portugal in meeting their commitments to reduce greenhouse gas emissions.
In addition, the vast majority of investments are expected to be located in the EIB's cohesion priority regions (91% according to the project pipeline), thus supporting the economic recovery in regions that were particularly affected by the COVID-19 pandemic.
For the construction facility, Santander acted as the facility and security agent. NatWest acted as documentation agent and KfW IPEX-Bank as hedging documentation agent. BNP Paribas, ING, Intesa Sanpaolo and Banco Sabadell further supported the facility.
The debt was significantly oversubscribed, confirming lenders’ strong interest in the financing.
CMS and White & Case (both Hamburg) acted as the borrowers’ and lenders’ legal counsel, respectively. Glas SAS in Frankfurt is acting as administration agent.
For the EIB, this short-term construction financing is breaking new ground, as the development bank had mainly acted as a long-term lender in the infrastructure space in the past.
This project was made possible because of an EU budget guarantee under the InvestEU programme, which enables the EIB to increase its risk-taking capacity and, in this particular case, to assume electricity merchant risk under a non-recourse financing structure, as the transaction does not involve any price hedge mechanism such as a power purchase agreement.
The InvestEU programme follows up on the success of the Investment Plan for Europe and aims to facilitate investments in the European Union. The landmark transaction not only significantly increases renewable energy generation capacity on the Iberian Peninsula, but also contributes to the objectives of the European Green Deal.
The bespoke €1 billion construction facility consists of €400 million credit from the EIB — supported by an EU budget guarantee under InvestEU — and €600 million from the consortium of commercial banks.
For the total project volume of over €2 billion, the remaining amount of more than €1 billion comes from funds managed by Aquila Capital and from the company’s capital. ■