Pacifico Renewables has secured exclusive access to a portfolio of 51.8 MW of wind farms in Poland.
Wind parks are currently under construction and are projected to generate approximately 191 GWh of pure green electricity per year once fully operational, saving more than 154,000 tons of CO2 per year.
Initially, Pacifico plans to refinance the current subordinated debt to the target entity. Later, after the satisfactory completion of the construction process, Pacifico intends to finalize talks on the acquisition of equity control of the project.
The 51.8 MW project built by Pacifico Energy Partners, Pacifico Renewables strategic partner, consists of three wind energy parks with a total of 20 Vestas wind turbines. The construction of wind parks is at an advanced stage, with no major delays to date, considering the global pandemic of COVID-19.
It is expected that the first electricity will be produced by the end of 2020. Full commercial operations are planned for March 2021. Total initial output of P50 electricity for all parks, once fully operational, is estimated to be approximately 191 GWh p.a.
This electricity is to be sold through a combination of a 15-year inflation-linked public support scheme, 3-year fixed price power purchase agreements and free market electricity sales.
The three project companies, each wholly owned by the target company, have in place senior debt financing and ancillary facilities provided by Bayerische Landesbank.
Term loans exceed approximately €50 million and are expected to mature on 30 June 2037. All-in (including hedge costs), the weighted annualized borrowing costs for term loans amount to approximately 3.6 per cent p.a. for the operational period.
Interest rates for the full debt maturity profile of senior term loans are protected by interest rate derivatives.
The target company holds a subordinated debt of approximately €38.7 million, which Pacifico plans to refinance with the net proceeds of the rights issue. Pacifico and the target company settled on an approximate date for the planned refinancing.
The loan shall have a period until the end of 2024 at an interest rate of 6.45 per cent, shall lay down market standard agreements (including a ban on paying dividends prior to the complete repayment of the loan) and shall be secured by way of a first-class undertaking on the stock of the target company.
Refinancing paves the way for the possible later purchase of wind farms, following their commercial date of operation, in the most economically desirable way for Pacifico.
In addition, Pacifico and the seller set out some primary business terms in a non-binding letter of intent and agreed to the exclusivity of negotiations by the end of 2021.
Based on the company’s valuation of approximately €103 million for the hypothetical complete acquisition of the project as of November 2020 an estimated 7 percent of the project’s projected leveraged IRR over the lifetime of the project.
“Once again we demonstrate our ability to structure acquisitions and debt instruments efficiently and for the benefit of our shareholders. With this potential gradual take-over we mitigate risks and ensure that proceeds will be invested immediately.”
Dr. Martin Siddiqui, Co-CEO.
“With excellent wind conditions and comparably high electricity prices, the Polish market offers strong fundamentals. In addition, we see substantial further growth opportunities for renewables in the European Union’s second most CO2-intensive economy.”
Christoph Strasser, Co-CEO.
