Enercon has reached financial close under a €118m senior facilities agreement for bridge financing to be used to construct a 134MW wind farm in Sweden.
The financing agreement, with DNB Bank, who acted as the sole mandated lead arranger, is for the construction of the Ersträsk North wind farm in the Markbygden area.
The project was sold in a parallel transaction under a forward sale structure to Ireland-based investor Greencoat Renewables which has already acquired the neighbouring wind farm Ersträsk South in October 2021.
Germany-based consultancy firm Capcora acted as sole financial advisor to Enercon in this transaction in relation to the debt financing while DNB Markets advised Enercon on the sale process.
“This financing format is fairly unique in the Swedish market and tailored to Enercon’s needs.
“The bridge financing enables Enercon to externally refinance a large part of the construction costs while maximising the sales value.
“We will certainly see more of these transactions in the coming years”, said Alexander Kuhn, managing partner at Capcora.
Ersträsk North consists of 32 turbines E-138 EP3 E2 turbines and has already commenced construction targeting commercial operation in the third quarter of 2023.
The project together with the operational 101MW wind farm Ersträsk South forms part of a large emerging cluster of renewable generation in northern Sweden, in the Markbygden area, which will create a complex with a capacity exceeding 3GW.
DNB Markets assisted Enercon in the structuring of the forward sale which was a key structural element for the bridge financing providing more certainty in terms of repayment and allowing for a higher gearing compared to a typical project financing.
According to the buyer information the wind farm will initially operate as a merchant asset but has the flexibility in the future to contract the electricity produced via a corporate power purchase agreement.
Enercon will continue to provide long term operations and maintenance services.
“We are glad to have simultaneously achieved closing of the sales and bridge financing in two individually managed yet interconnected processes. Ersträsk North is our second wind farm in Sweden equipped with the EP 3 WEC Series and will add great value to our new stakeholders in the project,” says Wolfgang Fettig, responsible for M&A activities in Sweden at Enercon.