Financial Close: Enercon Ssecures Interim Construction Financing For 134 MW Wind Farm In Sweden

Frankfurt am Main, Germany - German wind turbine manufacturer Enercon has reached financial close for the Ersträsk North wind farm in Sweden.

The financing partner is DNB Bank of Norway, which is acting as Sole Mandated Lead Arranger in this transaction, providing both a short-term loan facility and a VAT facility totalling €118 million based on a non-recourse structure both to be redeemed at COD.

Enercon was accompanied in the transaction by the consulting firm Capcora as exclusive financial advisor, while DNB Markets advised Enercon on the sales process.

The bridge financing will be used for the construction of the Ersträsk North project, which will have an installed capacity of 134.4 megawatts (MW) and is located in the Markbygden region in northern Sweden. The Ersträsk North project includes a total of 32 Enercon E-138 EP3 E2 turbines, and the construction phase has already begun. The farm is scheduled to be commissioned by Q4 2023.

The project was sold in parallel in a forward sale structure to the Irish investor Greencoat Renewables PLC, which has already taken over the neighboring Ersträsk South wind farm in October 2021 with a capacity of 101 MW. Ersträsk North and Ersträsk South are part of the huge renewable energy cluster with a capacity of over 3,000 MW (3 GW) being built in the Markbydgen area.

The forward sale to Greencoat, announced before, was a key structural element of the bridge financing, leading to greater certainty in terms of repayment. According to Greencoat, the wind power will initially be sold through power traders. However, it said there is also an option to sell the generated power through a power purchase agreement (PPA) in the future. Enercon will continue to provide long term operations and maintenance services.

"This financing format is fairly unique in the Swedish market and tailored to ENERCON’s needs. The bridge financing enables ENERCON to externally refinance a large part of the construction costs while maximizing the sales value. We will certainly see more of these transactions in the coming years," Alexander Kuhn, Managing Partner at Capcora, said of the transaction.

Source: IWR Online, 04 Jul 2022