European Commission: Aquila Clean Energy raises financing for 2.6 GW capacity renewable energy projects in Southern Europe with the support of InvestEU

Aquila Clean Energy EMEA, the clean energy development platform in Europe of Aquila Capital, has closed a EUR 1 billion construction facility, supported by the InvestEU programme. The financing will support the development and construction of Aquila Clean Energy’s entire renewable energy pipeline in Spain and Portugal over the next three years. The projects will be implemented in regions like Castilla y León, Comunidad Valenciana, Andalucía, Cantabria, Castilla-La Mancha and Murcia, in Spain, and Setúbal, Coimbra, Evora, Leiria, in Portugal.

The pipeline consists of more than 50 projects of predominately solar photovoltaics (PV) and onshore wind assets, with a total electricity generation capacity of 2.6 giga watts (GW), a volume equivalent to the annual consumption of around 1.4 million households. These projects will have an estimated yield of 5.3 Terawatt-hours per year.

The operation is aligned with the EU’s renewable energy targets and supports Spain and Portugal in meeting their commitments to reduce greenhouse gas emissions. In addition, the vast majority of investments are expected to be located in the EIB’s cohesion priority regions (91 % according to the project pipeline), thus supporting the economic recovery in these regions which were particularly affected by the COVID-19 pandemic.

For the construction facility, Santander acted as the Facility and Security Agent. NatWest acted as Documentation Agent and KfW IPEX-Bank as Hedging Documentation Agent. BNP Paribas, ING, Intesa SanPaolo and Banco Sabadell further supported the facility. The debt was significantly oversubscribed, confirming lenders’ strong interest in the financing.

CMS and White & Case (both Hamburg) acted as borrowers’ and lenders’ legal counsel, respectively. Glas SAS in Frankfurt is acting as Administration Agent.

For the EIB, this short-term construction financing is breaking new ground, as the development bank had mainly acted as long-term lender in the infrastructure space in the past. This project was made possible because of an EU budget guarantee under the InvestEU programme, which allows the EIB to increase its risk taking capacity and in this particular case, to assume electricity merchant risk under a non-recourse financing structure as the transaction does not involve any price hedge mechanism such as PPA.

The InvestEU programme follows up on the success of the Investment Plan for Europe and aims to facilitate investments in the EU. The landmark transaction announced today not only increases the renewable energy generation capacity on the Iberian Peninsula significantly, but also contributes to the objectives of the European Green Deal.

A bespoke EUR 1 billion construction facility consists of EUR 400 million credit from EIB – supported by an EU budget guarantee under InvestEU – and EUR 600 million from the consortium of the commercial banks. For the total project volume of over EUR 2 billion, the remaining amount of more than EUR 1 billion comes from funds managed by Aquila Capital.

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “Developing the infrastructure that will secure the objectives of the European Green Deal will require significant financial support. InvestEU will play an important role in mobilising the financing. I am delighted that this programme is facilitating a €2 billion investment that will help Spain and Portugal fulfil their green energy potential.”

Susanne Wermter, CEO of Aquila Clean Energy EMEA, emphasises: “We are extremely pleased being able 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. This transaction constitutes the largest financing in the history of Aquila Clean Energy and Aquila Capital. It demonstrates the creditability and appeal of our clean energy assets that aim to actively shape the European energy transition. With the financing now secured, we are opening up additional growth for our company and with the planned assets we will be able to offer our investors further interesting opportunities. I would like to thank all parties involved for their dedication and effort shown over the past twelve months to make this deal work.”

Ricardo Mourinho Félix, EIB Vice-President, highlights: “This construction facility is the first of its kind and a landmark transaction for the EIB. As the EU climate bank, we put sustainable development at the heart of our activities. We are therefore extremely proud of financing this project, through a Green Loan that contributes substantively to Europe’s energy transition and the security of energy supply.”