Friday, August 5, 2011

EBRD, IFC Sign ‘Landmark’ $266 Million of Romanian Wind Loans

The European Bank for Reconstruction and Development and International Finance Corp. loaned 188 million euros ($266 million) forRomania wind power, including funds from CaixaBank, Societe Generale (GLE) SA, and UniCredit SpA. (UCG)

“Commercial banks were looking for a landmark Romanian wind-farm transaction so we had quite a lot of interest linked to the presence of a lead-lender like ourselves,” said Adam Schwartzman, a senior investment officer at the IFC.

The deal shows Romanian projects are able to get commercial loans, Schwartzman said by phone today in Istanbul. The European Union has approved an incentive program for renewable energy technology in Romania as the country seeks to meet a goal of generating 24 percent of its power from green sources by 2020.

The IFC, the World Bank’s private-sector lending unit, and EBRD are each loaning 36.7 million euros to Pestera Power SA, a wind company majority owned by a Romanian unit of EDP Renovaveis SA (EDPR), Schwartzman said. The institutions will also each lend 57.4 million euros to fund the Cernavoda I and II wind parks, majority held by the local unit of EDP-Energias de Portugal SA.

The agencies are syndicating 50 million euros of the total loans to banks, Schwartzman said. “The commercial banks were skeptical about Romania but as time went on everyone could sense that the sector was ready to take-off,” he said.

The EU’s program grants producers of electricity from clean sources so-called Green Certificates for each megawatt-hour generated. Wind projects receive two certificates for each megawatt-hour until 2017 and one thereafter, Schwartzman said.

“We like to do strategic investments in one way or another that transform the market,” he said, declining to give the terms of the loans, except to say the tenure is “long-term.”

Pestera and Cernavoda are in Dobrogea region and jointly form one of the country’s largest wind farms at 228 megawatts.

To contact the reporter responsible for this story: Sally Bakewell in London atSbakewell1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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