| Project Detail |
Financing of the construction and operation of part of a 2.6 GW portfolio of onshore wind and solar photovoltaic (PV) plants across Spain and Portugal.
Additionality and Impact
The Project consists in the partial financing of a portfolio of solar photovoltaic plants and onshore wind farms in Spain and Portugal with a total capacity of 2.6 GW, to be developed by Aquila Capital over the years 2021-2023. The pipeline is split between PV plants (88%) and onshore wind farms (12%) and the assets will be mainly located in Spain (87.5% vs. 12.5% in Portugal).
The project increases renewable energy generation capacity in Spain and Portugal and contributes to national and EU 2030 climate objectives. Electricity is produced from low carbon sources (onshore wind and solar PV), addressing the market failure of negative climate and environmental externalities, through the reduction of carbon emissions and air pollution emissions. The project thus contributes to the EIBs priority of supporting the transition to a low carbon, environmentally friendly and climate resilient economy. The financing of this project is in line with the Banks lending priority objectives on renewable energy as well as the on climate action, environmental sustainability as well as social and economic cohesion.
As it relies on revenues from the market (the wholesale market and unsubsidized commercial Power Purchase Agreements, ("PPA")), in a sector characterised by incomplete markets, the project improves market efficiency and competition. It is expected to yield very good quality and results due to excellent social benefits, fair employment creation and a fair ESG rating.
The Bank will provide a meaningful part of the overall financing needs for this important Project through a construction facility of between 3-5 years aimed at getting the assets built and in operation. This type of loan with a bullet payment at the end of the tenor, with full merchant risk would be the first for EIB on a Project Finance (PF) basis. Currently, most commercial banks are still reluctant to offer such type of financing.
EIB is also offering the possibility to support the Project through a long-term structure on a PF basis. This approach gives the Promoter the necessary flexibility to roll out its sizable portfolio of assets within a quite short time horizon given that the initial formalisation of the Bridge Financings is much quicker than the execution of a long-term PF transaction, and does not require the signature of a PPA.
Aquila attaches great value added to the signaling effect provided by the EIB, as a reference financier with the strictest standards in terms of sustainability and environmental protection. Accordingly, EIBs financing standards label the loan as a "Green Loan" due to the quality it places on its investment and environment-related procedures, which contributes to attract investors and co-financiers to Aquila Capitals project.
Objectives
The project concerns the financing of the portfolio of ~2.40 GW of renewable energy projects that Aquila Capital ("Aquila," or "the Promoter") intends to implement in Spain and Portugal in the next years. It is comprised of 10 onshore wind (total capacity 305 MW) and 41 solar PV plants (total capacity 1.8 GWp) in Spain; as well as 6 solar PV plants in Portugal (total capacity 319 MWp).
Sector(s)
Energy - Electricity, gas, steam and air conditioning supply
Proposed EIB finance (Approximate amount)
EUR 400 million
Total cost (Approximate amount)
EUR 1260 million |
