Financing Renewable Energy Projects in Romania – Bank...

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

312th of April 2012

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]


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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

12th of April 2012

• 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


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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

12th of April 2012

Agenda



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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

712th of April 2012

� 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;


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

812th of April 2012

� 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:


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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;

12th of April 2012

� 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


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� Dividends payment only with bank’s acceptance� Shareholders loan subordination

12th of April 2012

Agenda



12th of April 201211

� Intesa Sanpaolo

� Contacts

Intesa Sanpaolo – Italian Leader with a European Scale

Source: Bloomberg Prices as at 30 March 2012


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


PLANT - GRANSOLAR GHELLA

Arranger, Underwriter2010

EUR 50 MINTERPORTO SOLARE

DI PADOVAMandated Lead Arranger, Underwriter, Agent Bank

2010

EUR 55 MDEL ENERGY

Sole Arranger, Underwriter2011


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




� 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


Financing Renewable Energy Projects in Romania – Bank...

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