IPPToday #85: Masdar-led joint venture agrees financing for largest wind farm in Serbia
- International Finance Corporation (IFC)
- European Bank for Reconstruction and Development (EBRD)
- Intesa Sanpaolo
- Erste Group
- Continental Wind Partners LLC
- The Green for Growth Fund, Southeast Europe (GGF)
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Financing for one of the largest wind power projects in mainland Europe has been agreed by the project’s shareholders and lenders at a ceremony in the Serbian capital of Belgrade.
Due for completion in the first half of 2019, the 158 MW capacity Čibuk 1 wind farm will be the largest utility-scale commercial wind project in Serbia and the Western Balkans.
Vetroelektrane Balkana (WEBG), the project company behind Čibuk 1, is wholly owned by Tesla Wind, a 60:40 joint venture between Masdar, Abu Dhabi Future Energy Company and Čibuk Wind Holding.
WEBG has signed a €215 million (US$253.1 million) loan deal with the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) to finance the construction of the project.
IFC's €107.7 million financing package comprises a direct €52.7 million senior loan, a €36.7 million loan provided through its Managed Co-Lending Portfolio Program and a €18.3 million B loan under IFC’s syndication umbrella. At the same time, The EBRD is providing a €107.7 million syndicated loan under an A/B loan structure.
The financing of the €300 million (US$353 million) wind farm also includes the B lenders Banca Intesa, Erste Bank, UniCredit, and The Green for Growth Fund.
Covering an area of 37 square kilometres, Čibuk 1 will be built around 50 kilometres outside Belgrade in the autonomous province of Vojvodina. Comprising 57 of GE Renewable Energy’s 2.75-120 wind turbines, the project is expected to electrify an estimated 113,000 homes on delivery and displace more than 370,000 tonnes of carbon dioxide per year. GE Renewable Energy will provide the manufacturing, delivery, installation, and commissioning of the turbines, with a 15-year full service agreement.
Besides helping to minimise the environmental impacts of Serbia’s power sector, Čibuk 1 is expected to create as many as 400 local jobs during construction while also delivering 50 kilometres of new roads.
On completion, Čibuk 1 will be Masdar’s fourth wind farm in Europe after the 630MW London Array, the world’s largest offshore wind farm in operation, the 402MW Dudgeon offshore wind farm in England, and Hywind Scotland, a 30MW floating wind power development situated near the coast of Aberdeenshire.
Mohamed Al Ramahi, CEO of Masdar, said:
“We would like to thank the Government of Serbia, Mubadala Investment Company, as well as the lenders, advisors, and all the other parties involved in reaching this critical milestone. The development of the largest wind farm in Serbia and the Western Balkans is a pivotal moment for the expansion of renewables in the region and positions Serbia at the forefront of Europe’s fastest growing alternative energy sector. At Masdar, we are proud to have this opportunity to contribute our expertise and experience acquired over the last 11 years to the diversification of Serbia’s energy mix, working alongside our joint-venture partners.”
Harry Boyd-Carpenter, EBRD Director of Power and Energy Utilities, commented:
“The Čibuk wind farm is a breakthrough for Serbia as the country works to meet its commitment to produce 27 per cent of domestic power needs from renewable energy sources by 2020. The EBRD has worked closely with the government to develop and refine the regulatory framework for the sector and these efforts have now unlocked job-generating foreign investment and the first wave of renewable energy projects.”
Thomas Lubeck, IFC’s Regional Manager for Central and Southeastern Europe, said:
“This project highlights IFC’s creating markets strategy, paving the way for other renewable energy projects. It is a result of our cooperation with all stakeholders and our work with Serbia’s government to improve relevant bylaws and the model power purchase agreement. IFC is a global leader in facilitating cross border investments and our support for renewable energy is a key part of our work to help mitigate climate change.”