SOFIA (Bulgaria), October 4 (SeeNews) – UniCredit Leasing expects to disburse around 75 million euro ($97 million) in financing for renewable energy projects in Southeast Europe (SEE) this year and to match that figure in 2013, a senior company official said.
“In 2012 we expect to distribute RES [renewable energy sources] financing of roughly 10 million euro in Bulgaria and 50-60 million euro in Romania. Additionally we have already committed to projects in Romania that will be built in 2013. Furthermore there are projects in the pipeline in Serbia, Croatia and Slovenia, which may lead to transaction closings in 2013. Overall, we expect to extend around 75 million euro this year in SEE. Judging by current market developments, a similar volume can be expected again next year," Martin Mayr, head of UniCredit Leasing Group’s Renewable Energy Competence Centre, told SeeNews in an emailed interview.
UniCredit Leasing is seeing very strong demand for funding for RES projects in Romania and some selective project proposals in Serbia while funding inquiries in Croatia are on the increase. In Bulgaria, funding demand was focused on photovoltaic (PV) plants to be connected to the grid in the first half of 2012, but has currently more or less dried up.
The group currently has under review funding applications for wind, PV, hydro and biogas projects in Romania, PV and biogas projects in Slovenia, wind projects in Croatia, wind and biogas projects in Serbia and PV in Bulgaria.
“In 2013, the bulk of closings will stay highest in Romania where investor activity is highest and where we have recently also seen strong demand from Italian investors,” Mayr said.
So far in 2012, two UniCredit Leasing-backed PV plants have been connected to the grid in Bulgaria with as many wind parks having also been completed and powered up in Romania. The group expects to see by the end of the year a further two PV plants it has backed in Romania come on stream.
The incentive schemes for RES projects that are in place in Slovenia, Croatia, Serbia, Romania and Bulgaria, at least in principle, make those markets relevant for UniCredit Leasing.
“Additionally we are also providing financing in Bosnia and Herzegovina, but the separate tariffs there of the Serb Republic entity, on the one hand, and the Muslim-Croat Federation, on the other, are insufficient for non-recourse project financing according to our internal policy, which requires a state-wide tariff. The tariff systems in Montenegro and Macedonia are frequently cited by interested investors and seem to be attractive as well. In Bulgaria, the recent tariff cuts are not very supportive in terms of new developments. There, we only see some potential in biogas on the backdrop of the current tariffs,” the official said.
Following its first review of all transactions in the RES sector in Bulgaria, UniCredit Leasing does not expect direct losses from the tariffs cuts as the extended financing was structured cautiously to begin with.
“One or two projects in Bulgaria may require minor adjustments to the financing structure, but that is manageable. However, our clients there will suffer a severe impact. Overall, any retroactive measure, which impacts the cash flow of renewable energy projects, reduces the confidence of banks and lessors to finance further projects on a non-recourse basis.”
Looking ahead, UniCredit Leasing is especially bullish on the potential of biogas - not just for energy production but also in terms of waste treatment, across the SEE region.
Small hydro projects in SEE are also very attractive for the group since their dependency on tariffs is much lower. “We also prefer wind over solar projects for that reason, and typically limit the financing granted to PV projects quite strictly. In Romania, the current limit is a financing volume of 1.2 euro per watt-peak. On the wind segment, we still see untapped potential in Croatia and Serbia. Romania is developing all RES technologies quickly and we see attractive opportunities there for 2013.”
Commenting on the RES funding potential in EU-bound Croatia, Mayr said the group is seeing there a clear regulatory framework that guarantees predictable returns and legal security. “We see these factors in Croatia and we are moving into financing more in that market. Zagrebacka Banka [part of UniCredit Group] is leading the local banking market also in renewables and has recently decided to set up a dedicated team for RES projects in Zagreb.”
($=0.7728 euro)
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