French renewable energy producer Albioma SA (EPA:ABIO) on Tuesday announced that its 108-MW Bois-Rouge coal-fired power plant on Reunion Island has received clearance to convert to 100% biomass.
The company also unveiled this week that it successfully concluded its first sustainability-linked Euro Private Placement (Euro PP), raising a total of EUR 100 million (USD 121.3m).
On December 3, the Energy Regulatory Commission (CRE) validated the offsetting resulting from the signature of an amendment to the power purchase agreement (PPA) already in place with Electricite de France SA (EPA:EDF) relating to the biomass conversion. Concurrently, the electricity sales contract has been extended until 2043.
At present, the Albioma Bois-Rouge plant meets about 25% of the region’s total power consumption and following the conversion will make renewables the majority source in Reunion Island’s energy mix, raising the share from 35% to 51%.
Conversion work is set to begin as early as 2021 so it can be finalised in the second half of 2023. The upgraded plant will rely mostly on local biomass deposits, including bagasse, forest wood and pruning wood.
As per the Euro PP, it consists of two tranches at 7 and 8 years and exceeds the previous one from 2014 by EUR 20 million. The company said it will use the fresh funds to refinance the existing Euro PP, which was due on December 8, and for general financing needs over the medium term.
The transaction was settled on Monday with the help of Natixis and Societe Generale.
“This sustainable Euro PP enables us to diversify our sources of financing and gives us greater visibility to carry out our investment programme in the coming years under excellent conditions,” commented CEO Frederic Moyne.
Albioma aims to achieve a 95%-100% share of renewable energy in its mix by the end of the decade. In addition to biomass, the company will bet on solar power.
(EUR 1.0 = USD 1.213)
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