BETICA PV PORTFOLIO

Promoteur – Intermédiaire Financier

EVERWOOD CAPITAL SGEIC SA

Lieu

• Espagne

Description

The project will finance 5 utility-scale solar photovoltaic (PV) plants with a total capacity of 450MWp to be located in the provinces of Cordoba and Seville (Andalusia region).

Additionality and Impact

The project is in line with the InvestEU objective of the development of the energy sector in accordance with the Energy Union priorities. It concerns the development and operation of 5 PV farms in Spain, with a total capacity of 450MW.

The project increases the renewable energy generation capacity in Spain and contributes to national and EU 2030 climate objectives. The financing of this project is in line with the Bank's lending priority objectives on Renewable Energy as well as on Climate Action, Environmental Sustainability and Social and Economic Cohesion.

The project produces electricity from low carbon sources (solar PV plants), addressing the market failure of negative climate and environmental externalities, through the reduction of carbon emissions and other air pollution (compared to fossil-fuel generation).

As the project is expected to rely purely on revenues from the market (the wholesale market), in a sector characterised by incomplete markets (limited forward/hedging, lack of scarcity pricing and lack of locational pricing), it improves market efficiency and competition. The PV plants are located in EIB Cohesion Priority regions. Therefore, the project is expected to yield excellent quality and results due to excellent rated, broader social benefits and fair employment creation.

Considering that the project will operate on a purely merchant basis in a context of price volatility and decreasing solar capture prices in the Spanish market, the project entails high financial-rate-of-return risk. EIB's presence has a strong signalling and catalytic effect in this respect.

The project falls under the InvestEU objectives as it concerns the generation, supply or use of clean and sustainable renewable and safe and sustainable other zero and low-emission energy sources and solutions.

The Bank's contribution on the financial contribution side accelerates the funding of the project and helps crowding in other financiers. The Bank will provide a meaningful part of the overall financing needs of the project through a senior debt facility of up to 9 years aimed at getting the assets built and in operation. This type of loan with a balloon payment at the end of the tenor, with full merchant risk has been implemented on a Project Finance basis only in very limited number of transactions. Currently, most commercial banks are still reluctant to offer such type of financing in Spain. The Bank provides expertise in structuring and lending to renewable energy projects, applying standard and well tested project finance principles in other recent transactions. This will improve the structuring of the operation through close co-operation with the promoter and the commercial lenders. The project would not have been carried out (to the same extent) by the EIB without the InvestEU support.

Objectifs

The aim is to contribute towards the national and EU energy and climate goals, namely helping to decarbonise the electricity production and decrease the reliance on fossil fuels. The PV plants will be implemented in areas classified as EIB Cohesion Priority Regions, thus supporting regional development.

Secteur(s)

• Énergie - Production et distribution d'électricité, de gaz, de vapeur et d'air conditionné

Montant BEI envisagé (montant approximatif)

EUR 148 million

Coût total (montant approximatif)

EUR 346 million

Aspects environnementaux

The PV plants and part of the ancillary infrastructure fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU (as amended by the Directive 2014/52/EU). The project scope also includes overhead transmission lines -for the connection of the plants to the electricity grid falling under Annex I due to their technical characteristics, thus subject to an EIA process. Compliance with applicable EU Directives, in particular concerning cumulative impacts and potential impacts on nature conservation sites, will be further assessed during the appraisal.

Passation des marchés

The promoter is a private company and the schemes envisaged for this operation are market-based renewable energy projects, which do not enjoy any special or exclusive rights. Therefore, private sector procurement procedures should apply.

Statut

Signé - 15/11/2024