financing renewable energy projects in romania – bank...
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Financing Renewable Energy Projects in Romania – Bank approachRomania – Bank approach
Convegno Energia Rinnovabile nuove frontiere e oppo rtunita’ in RomaniaAna Maria Cretu – Structured Finance, Corporate DepartmentJW Marriott Bucharest Grand Hotel, 12th of April 2012
Agenda
� Renewable Energy – opportunities and challenges
� Assessing and structuring deals on Renewable Energy
12th of April 20122
� Intesa Sanpaolo
� Contacts
Legal Frame – National Regulatory
� Law no. 220/2008 regarding the promotion of renewable energy sources, successively amended and supplemented by:� Government Ordinance no. 29/2010� Government Emergency Ordinance no. 88/2011
� ANRE Orders:ANRE Order no. 42/20.10.2011 – Regulation for Accreditation of E-RES producers
Renewable Energy – opportunities and challenges
� ANRE Order no. 42/20.10.2011 – Regulation for Accreditation of E-RES producers� ANRE Order no. 43/20.10.2011 – Regulation for issuing CV� ANRE Order no. 44/20.10.2011 – Rules of organization and operation of green certificates market OPCOM� ANRE Order no. 45/20.10.2011 – Methodology for establishing the annual quotas of purchasing green certificates� ANRE Order no. 6/24.02. 2012 – Methodology for monitoring the system promoting the energy generated from renewable energy sources through green certificates issuance
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Incentive scheme – instruments:1. Mandatory quota system, by law
– national target for E-RES, in total electricity consumption [35% in 2015, 38% in 2020]– national target for E-RES, in total primary energy consumption [24% in 2020]– target for E-RES that benefit of support scheme, in total electricity consumption [16% in 2015, 20% in 2020]
2. ANRE sets in December each year for next year, annual mandatory quota estimated for acquisition of green certificates [GC]
Renewable Energy – opportunities and challenges
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for acquisition of green certificates [GC]– assumptions: mandatory quota, estimated energy consumption, estimated E-RES installed capacity, no. of green certificate incentive scheme approved by law– 2011 – 0,03746 GC/MWh [final], 2012 – 0,11 GC/MWh [estimated]
Incentive scheme – participants:ANRE, Transelectrica, OPCOM, E-RES Producers, Opera tors required to buy GC
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• Changes in Legislation [overcompensation]• Projects over 125 Mw installed capacity
Legal risk-Regulatory
• Off–take contracts [PPAs duration]• Dispatching risk
Market risk
• Permitting process• Third parties involved in project (legal and technical due diligence,
Main issues with impact on projects’ bankability
Renewable Energy – opportunities and challenges
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• Third parties involved in project (legal and technical due diligence, EPC contractors)
• Limited grid capacity
Development risk
• Prices predictability [energy and green certificates]• Green certificate price - FX rate applied, indexation with euro-inflation
rateRevenue risk
Operational risk
• Un-experienced local operators • Few international players with limited track record on local market
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Agenda
� Renewable Energy – opportunities and challenges
� Assessing and structuring deals on Renewable Energy
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� Intesa Sanpaolo
� Contacts
12th of April 2012
� Documentation Requirements
Standard information package requested for issuing an expression of interest / non-binding offer:
� Sponsor presentation, including a description of relevant projects developed� Project description and project company [borrower] presentation� Property documents and status of the permits� Feasibility study, including technical assessment
Assessing and structuring deals on Renewable Energy
� Feasibility study, including technical assessment� EU Funds file (if the case)� Financials of the project company and of the Sponsor� Technical and legal preliminary due diligence satisfactory to the bank
The assessment of the bank for credit granting starts only at an advanced stage of permitting
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� Main characteristics of the financing structure:
� Financed amount – up to 60-70% of Total Project Costs� Upfront equity – minim 75% of Equity, already spent or deposited in a dedicated account� Maturity – weighted average life10 years, to be fine-tuned according to Cash-Flow Bank case� Grace period – construction period plus putting into operation/operation permit period� Reimbursement – amortizing� Standard security package
Pledge over all present and future assets of the borrower, fully insured;
Assessing and structuring deals on Renewable Energy
o Pledge over all present and future assets of the borrower, fully insured;o Mortgage on the plot of land, if the case;o Assignment of all present an future revenues [off-take contracts]o Assignment of all insurance policies related to the pledged assets and of all
securities/warranties from the contractorso Pledge on the shares of the borrowero Pledge on all bank accountso Sponsor commitment, in a form acceptable to the bank
� Accounts – Current Account, Collection Account, Equity Account, Debt Service Reserve Account – DSRA, Operation & Maintenance Reserve Account – O&MRA
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� Financial covenants:� DSCR – min 120% and average 140% in Cash Flow Bank Case under P50 scenario� Cash sweep in a certain % to reduce the tail of the initial maturity� DSRA set-up to cover at least 6 months of DS� O&MRA set-up to cover 6 months of O&M costs� FX risk coverage
Non financial conditions:
Assessing and structuring deals on Renewable Energy
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� Non financial conditions:� Off-take contract signed for a period of time equal with the maturity of loan, with floor price
guaranteed� Loan monitor reports during development phase� Insurer, valuator, legal and technical advisors, equipment providers, EPC and O&M
contractors, loan monitor - acceptable to the bank� Business interruption insurance policy� Standard covenants: interdiction for other financial debt contracting, dividends payment,
opening current accounts;
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� Reputable sponsor with relevant expertise in the fi eld
� Sponsor’s undertakings : � Ownership clause� Cost overrun guarantee� Completion guarantee� Debt service shortfall guarantee or strong corporate guarantee
Dividends payment only with bank’s acceptance
Assessing and structuring deals on Renewable Energy
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� Dividends payment only with bank’s acceptance� Shareholders loan subordination
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Agenda
� Renewable Energy – opportunities and challenges
� Assessing and structuring deals on Renewable Energy
12th of April 201211
� Intesa Sanpaolo
� Contacts
Intesa Sanpaolo – Italian Leader with a European Scale
Source: Bloomberg Prices as at 30 March 2012
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The bank is present in most of the regions of the country covering with the branches network all the financial range of products need by both corporate and retail customers.
� Total units: 74TIMIS
ARAD
BIHOR
SATUMARE
S ALAJ
MARAMURES
CLUJ
BISTRITA NASAUD
SUCEAVA
MURES
IASI
VASLUIBACAU
GALATI
ALBA
SIBIU BRASOV
BOTOSANI
NEAMT
COVASNAVRANCEA
HARGHITA
Intesa Sanpaolo – in Romania
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� Total units: 74TIMIS GALATIHUNEDOARA
CARAS SEVERIN
MEHEDINTI
DOLJ
ARGES
DÂMBOVITA
PRAHOVA
SIBIU BRASOV
BUZAU
CONSTANTA
BUCURESTI
GORJ
COVASNA
VALCEA
OLT
TELEORMANGIURGIU
CALARASI
IALOMITA
BRAILA TULCEA
VRANCEA
12th of April 2012
Intesa Sanpaolo – Credentials of Banca IMI, BIIS, IS PRO
USD 225 MProject financing of a gas fired
power plantLead Arrangers & Hedging Bank
USA2011
USD 235 MProject financing for a 201 MW wind
power plantMandated Lead Arranger
China2010
EUR 255 M3SUN
Photovoltaic FactoryMandated Lead Arranger
Italy2010
EUR 107 MFixed Structure Land Photovoltaic
Project 35 MWArranger
Italy2010
EUR 600 M150 MW Termosolar Planta Saetilla
S.L. & Majadas S.L.Mandated Lead Arranger
Spain2009
EUR 604 MSER Portfolio
350 MW Wind FarmMandated Lead Arranger
Italy2008
EUR 115 MProject Financing
EUR 146 MWind Plant-GEMSA SRL
Project FinancingEUR 25 M
INTER SOLAR
EUR 91 MDAUNIA SAVIGNANO
TOZZI RENEWABLE ENERGY
Eur 20 MPhotovoltaic Power Plant
Compagnia Solare
Eur 20 MPhotovoltaic Power Plants
On GREENHOUSES MARCHE REGION
USD 1.4 BNProject financing for wind farm
LC Issuer USA2010
EUR 49 MCRE Project
20 MW Wind FarmFinancial Advisor, Sole
Underwriter & MLA Italy2007
USD 1.78 BNProject financing for a 550MW thin-film PV generation facility
LC Facility ProviderUSA2011
EUR 85.5 MFixed Structure Land
Photovoltaic Project 20 MWMandated Lead Arranger
Italy2011
Solar Life Energy
EUR 22.5 MRooftop Photovoltaic Project
7.5 MWMandated Lead Arranger
Italy2010
EUR 589.2 MFinancing the construction of twoconcentrated Solar power
PlantsMandated Lead Arranger
Spain2011
14
Project FinancingMandated Lead Arranger
2010
Project FinancingMandated Lead Arranger
2010
INTER SOLAR Mandated Lead Arranger
2011
TOZZI RENEWABLE ENERGYMandated Lead Arranger
2010
Compagnia SolareLead Arranger, Underwriter
2010
MARCHE REGIONMandated Lead Arranger
2010
EUR 2 MHidroclear Clear Energy
Project FinanceISPRO 2010
FORUM DEVELOPMENT
EUR 1.2 MProject Finance
ISPRO
EUR 24 MVENUSIA S.R.L.
Sole ArrangerUnderwriter
2011
EUR 24 MPHOTOVOLTAIC POWER
PLANT - SISTEMA SOLARE Advisor, Arranger
Underwriter2009
EUR 68,5 MSOLETO CITTA' DEL SOLE -
SOLENERGYHOLDING FOTOVOLTAICA
Mandated Lead Arranger, Underwriter
2010
EUR 142 MMONTALTO DI CASTRO
PHOTOVOLTAIC POWER PLANT - CASSIOPEA PV Mandated Lead Arranger,
Underwriter, Insurance Bank and Account Bank
2009
EUR 261 MWIND PLANT – GEOPOWER
SARDEGNAMandated Lead Arranger,
Underwriter, Coordinating Bank and Modeling Bank
2010
EUR 41 MPHOTOVOLTAIC POWER
PLANT - GRANSOLAR GHELLA
Arranger, Underwriter2010
EUR 50 MINTERPORTO SOLARE
DI PADOVAMandated Lead Arranger, Underwriter, Agent Bank
2010
EUR 55 MDEL ENERGY
Sole Arranger, Underwriter2011
EUR 28 MPHOTOVOLTAIC POWER
PLANT IN BARISole Underwriter
2010
EUR 192 MWIND PLANT – GEOPOWER
SARDEGNAMandated Lead Arranger,
Underwriter, Agent Bank and Account Bank
2010
12th of April 2012
Agenda
� Renewable Energy – opportunities and challenges
� Assessing and structuring deals on Renewable Energy
12th of April 201215
� Intesa Sanpaolo
� Contacts
■ Marco SistiHead of [email protected]: +40 21 4053 613
■ Ana Maria Cretu Carmen Maican [email protected] [email protected] of Structured Finance RM – Structured Finance Phone: +40 21 4053 638 Phone: +40 21 4053 685
Contacts
Phone: +40 21 4053 638 Phone: +40 21 4053 685
■ Alina Bondor Gabriel [email protected] [email protected] of Multinational Customers SRM – Multinational C ustomersPhone: +40 21 4053 639 Phone: +40 21 4053 635
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