Turbine manufacturer Vestas has arranged an export credit agency-backed payment deferral facility for three wind farms being developed by Australian subsidiaries of Global Power Generation. The two-year A$415 million (US$319 million) facility will be used for purchasing receivables related to the installation of Vestas wind turbines for the Ryan Corner, Hawkesdale and Berrybank Two wind projects in the southeastern state of Victoria.
This is the first time that Vestas has offered an ECA-backed payment deferral facility anywhere in the world. The wind turbine exports will be covered by Sinosure, together with EKF of Denmark. The facility is being provided by Banco Santander and Deutsche Bank.
The projects are sponsored by local Australian subsidiaries of Global Power Generation (GPG), which is a joint venture between Spanish multinational Naturgy and the Kuwait Investment Authority.
“We are pleased to partner with Vestas and support General Power Generation’s short-term financing needs," says Matthew Moodey, Asia-Pacific head of natural resource finance and trade & loans structuring at Deutsche Bank, adding that it illustrates the bank's strong focus on sustainable financing in the region.
“This is a landmark transaction for Vestas. It demonstrates our ability to structure innovative financial solutions by collaborating with experienced global institutions like Deutsche Bank," says Glenn Sundaram, director, head of financial solutions for Asia-Pacific at Vestas. "Their long-standing relationship with China Export & Credit Insurance Corporation was extremely valuable throughout the structuring process of this transaction."
According to Vestas, 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 facility to extend the payment terms by two years, bringing in Santander, Deutsche, Sinosure and EKF. Norton Rose Fulbright was counsel to Vestas.
In another financing, Vestas on April 29 signed a 2 billion euro (US$2.42 billion) revolving multi-currency credit facility.
The facility’s interest rate margin will be adjusted based on sustainability-linked performance targets, marking the first time the company has engaged in sustainability-linked financing. These targets measure Vestas’ ability to reduce its own carbon footprint and enhance workplace safety while subsequently adding ambitious targets to improve the carbon footprint across its supply chain. Performance targets will also cover ambitions around more sustainable materials use, and increased recyclability across the turbine value chain.
HSBC Continental Europe (formerly HSBC France) and Skandinaviska Enskilda Banken (SEB) acted as co-ordinating mandated lead arrangers and bookrunners. In addition, Banco Santander, Citi, DNB, Nordea, Societe Generale, and Unicredit joined as mandated lead arrangers and bookrunners, while BNP Paribas, Danske Bank, JP Morgan, and Standard Chartered joined as mandated lead arrangers.
HSBC was the documentation Agent for the facility. SEB was the facility agent and sustainability adviser.
The facility, which is available for general corporate purposes, has a five-year tenor with two one-year extension options. It replaces Vestas’ undrawn 1.15 billion euro revolving credit facility signed in 2017.