Danish wind giant Vestas has signed a bumper accounts receivables facility to allow it to extend payment terms for exports of its wind turbines to three Australian wind farms.
The facility, valued at A$415mn, will be used for purchasing receivables on a limited recourse basis arising out of the supply and installation of Vestas’ wind turbines for the Ryan Corner, Hawkesdale and Berrybank Two wind farms in the Australian state of Victoria. The projects are owned by Australian subsidiaries of Global Power Generation (GPG), a joint venture between Spanish multinational Naturgy and the Kuwait Investment Authority.
In a statement, Vestas says that GPG was looking for short-term financing options to improve its project returns on the three wind farms. Over a nine-month process, Vestas Financial Solutions in Asia Pacific structured the export credit agency (ECA)-backed facility to extend the payment terms by two years, bringing in Santander and Deutsche Bank as financiers, and China’s Sinosure as well as Denmark’s EKF as the ECA backers.
“This payment deferral facility is a landmark transaction for Vestas that demonstrates our capability to structure innovative financial solutions,” says Glenn Sundaram, head of financial solutions at Vestas Asia Pacific. “Our ability to leverage strong relationships and collaborate with global financial institutions ensured we tailored a solution that optimised GPG’s return across these three projects. In this instance, I would like to thank Deutsche Bank, Banco Santander, Vestas’ export credit partners, EKF and Sinosure, our external counsel, Norton Rose Fulbright and importantly the team at GPG for their fantastic support throughout the structuring of these facilities.”
In a separate statement, Deutsche Bank outlines that it is providing A$313.97mn of the total support, covering exports to Ryan Corner and Hawkesdale, with Sinosure insuring the exports. According to Sundaram, Deutsche’s long-standing relationship with the Chinese ECA proved to be “extremely valuable” throughout the structuring process of this transaction.
“This new financial solution led by Vestas demonstrates our ability to work with sustainable energy providers, buyers/operators and ECAs to structure cross-border ESG transactions which make the sustainable options commercially viable,” adds Kamran Khan, Deutsche Bank’s head of ESG for APAC. “Our high standards for ESG compliance and our world-class financial structuring and pricing capabilities provided the necessary comfort to all parties that this transaction will be received by the market as a high-end ESG transaction, establishing important benchmarks for the renewable energy sector in Australia.”
Vestas says that this is the first time that it has offered an ECA-backed payment deferral facility anywhere in the world, adding that it believes this new mechanism will provide another path for financial backing and project returns to its customers.
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