banks

Banks may also join EDEYEP’s SPV for offshore wind farms

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A special purpose vehicle being prepared by the energy ministry and authorities to oversee the development of offshore wind farms in Greece may include a banking group as a partner alongside EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, and power grid operator IPTO.

Banks could play an institutional role in the SPV to be established for what is considered a high-risk domain, whereas, on the contrary, individual investors would be less likely to commit capital to ventures entailing increased risk, officials have noted.

The energy ministry and EDEYEP’s leadership are currently engaged in talks for final decisions on the SPV’s line-up ahead of a related legislative revision, for the SPV, expected to be submitted to Parliament towards the end of March.

The SPV will be headed by EDEYEP so that the company may organize wind and deep-sea studies at marine areas marked out for a first wave of offshore wind farms.

Panagiotis Ladakakos, President of ELETAEN, the Greek Wind Energy Association, has pointed out a series of concerns that will need to be addressed by authorities in the lead-up to the development of the offshore wind farms sector in Greece, including shaping an appropriate structure for upcoming auctions; ensuring support for EDEYEP, so that the company may fulfil its role; and remaining fully aware of positions maintained by local communities.

The ELETEAN president raised these points at an offshore wind farms event staged by RAAEY, the Regulatory Authority for Waste, Energy and Water, as part of Renewable Energy Tech, the main event held by energypress.

Energy storage ambiguities need to be cleared for bank financing

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Banks have incorporated the prospect of financing energy storage facilities into their business planning and are currently conducting studies in order to formulate an appropriate financing formula, but sector ambiguities still need to be cleared up if lenders are to offer investors financial support.

Banks need clarity on two issues. Firstly, ambiguity as to the revenues that storage units can earn from participation in the market needs needs to be cleared. Also, regulatory framework specifics are needed in order to offer clear information on how subsidies and other support would be awarded to energy storage units.

Investors behind energy storage projects must be able to determine revenues as part of their business plans if banks are to conduct proper evaluations ahead of financing.

PPAs no longer unfamiliar ground for banks, offering corporate financing

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Banks no longer view green-energy PPAs with hesitation and have opened up to providing significant corporate financing to investors involved in such agreements, a major turnaround observed over the past few months, market officials have observed.

Banks are focusing on corporate PPAs as interest by investors in such arrangements has grown considerably, market officials told energypress.

Unlike the recent past, banking institutions are now well versed on PPAs as they have acquired the necessary know-how and appropriate tools to assess credit profiles of parties involved, as well as risks entailed.

This shift in attitude by banks, underlined by participants at a recent Energyyear conference, is helping nurture a growing number of PPAs in the Greek market.

However, banks remain reserved on providing financing solutions for merchant PVs, still a developing sub-sector, market officials noted, but are closely tracking the sector’s development for prospective financing.

Banks scrutinizing PPAs ahead of RES project financing

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Banks are scrutinizing power purchase agreements (PPAs) on a case-by-case basis, applying their own assessment criteria rather than general formulas that could underestimate the risk level of transactions, before moving ahead with financing applications for renewable energy units.

A main concern for bank executives contacted by energypress is whether the risk assessment process for PPAs should also take into account risks arising from other activities pursued by applicants.

Banking sector officials added that the competent market regulator, following related discussion, is expected to intervene by issuing a decision that will not impose specific assessment rules, but, instead, describe associated risks and provide banks with flexibility to analyze corporate PPAs on a case-by-case basis ahead of their respective project financing decisions.

“Right now, off-taker assessment is the key issue for banks. It’s all about the scenarios of how we assess off-takers credit-wise, overall, not just in extreme market scenarios or special circumstances,” Argyro Banila, Head of Structured Financing Corporate & Investment Banking at the National Bank of Greece, told the recent Renewable & Storage Forum, an event organized by energypress.