Aquila Capital nabs financing for 2.6-GW Iberian renewables pipeline
La Cabrita solar farm, Spain. Image source: Aquila Capital (www.aquila-capital.de)
Aquila Clean Energy EMEA, the European clean energy development platform of Hamburg-based investment manager Aquila Capital, has secured a EUR-1-billion (USD 992m) built-to-sell construction facility to finance its 2.6-GW renewable energy pipeline in Spain and Portugal.
The funds will support the development and construction of the pipeline, which includes over 50 projects, mainly solar and onshore wind, over the next three years, according to an announcement today.
The financing package includes a EUR-400-million loan from the European Investment Bank (EIB), backed by an EU budget guarantee under InvestEU programme, and EUR 600 million from a consortium of commercial banks. With the projects requiring total capital of over EUR 2 billion, the balance will be provided by funds managed by Aquila Capital and the company’s capital.
For the EIB, the short-term construction financing marks a departure from its usual role of a long-term lender. It said the EU budget guarantee has enabled it to assume electricity merchant risk under a non-recourse financing structure as the deal does not include any price hedge mechanism such as a power purchase agreement (PPA).
This is also the largest financing ever for Aquila Clean Energy and Aquila Capital. Aquila Clean Energy EMEA chief executive Susanne Wermter expressed satisfaction with the company’s ability to “secure this landmark financing in a market environment which is marked by high inflation, rising interest rates, supply chain issues and the war in the Ukraine.”
The projects are expected to deliver 5.3 TWh of electricity per year, representing the annual needs of around 1.4 million households.