Teamwork for the energy of the future
WIRSOL has constructed the biggest solar park in the Netherlands in the port of Delfzijl. The project was financed by LBBW.
Have you googled anything yet today? If so, you can be sure that your your hit list was generated using green energy. That’s because Google operates its data centers worldwide entirely with energy from renewable sources. At its huge server park opened in early 2017 in the Dutch port of Eemshaven, for example, the search engine giant relies on a combination of wind and solar power. The solar power is generated at the biggest solar park in the Netherlands in nearby Delfzijl (see photo above). In July this year, Google secured the entire volume of the energy produced there for a period of ten years from the energy provider Eneco. In doing so, it demonstrated that the choice of location for the roughly 30-hectare plant completed in 2016 was exactly right.
The company responsible for the successful project in Delfzijl is WIRCON GmbH, from Waghäusel in Baden-Württemberg. Under the WIRSOL brand, the experts in renewable energy projects develop solar and wind power plants all around the world. “SunPort Delfzijl represented an important first step into the Dutch market for us,” says Dr Peter Vest, Managing Director at WIRSOL. The investment volume came to EUR 40m in total. EUR 30m is covered by project finance in the form of a long-term loan with a term of 15 years. This was already the second solar park that the company, founded in 2013, had implemented with project finance from Landesbank Baden-Württemberg (LBBW). Back in 2015, WIRSOL had constructed Scandinavia’s biggest photovoltaic plant on an 80-hectare site in Lerchenborg on the Baltic coast of Denmark and decided on an offer from LBBW for the financing of this project, too. And the next chapter of the collaboration has already begun: WIRSOL is currently constructing a wind farm in the Black Forest with finance from LBBW.
“After considerable reticence during the crisis years for the solar panel sector, many banks are now showing interest in project finance for renewable energy production again,” says Dr Peter Vest, explaining the current situation. There is a healthy competitive situation, he says. The decision in favor of the bank’s offer in an area subject to fierce international competition had ultimately been made “primarily due to the really good conditions offered by LBBW.” In addition, the complete package that LBBW tailors individually for each project was a perfect fit. “The collaboration works because our teams are excellently coordinated with one another,” is how the head of WIRSOL sums up the experiences of the joint projects.
The first point of contact for the company from Waghäusl is always Andreas Schück, corporate customer advisor at the LBBW subsidiary BW-Bank in Karlsruhe. He is very well acquainted with the company, knows about the particular challenges involved in the development of major energy projects, and can draw on additional expertise from the LBBW Group whenever necessary. In addition to structured finance, the financing package for the solar park in the Netherlands also comprised interest rate hedging, a cash management solution and all necessary accounts, including electronic banking. Packages like this are not handled by the corporate customer advisor alone. “Major project finance in line with international standards is something that we always develop in a team,” says Schück, explaining the process. The Legal and Risk Management departments at LBBW are also closely involved with projects of this kind.
One important player in this team was Jürgen Klingel, Project Finance Director at LBBW. “Our task was to develop a financing structure on the basis of the Dutch feed-in regime that fitted well with both the specific project conditions and the bank’s risk management.” After all, the remuneration regulations for solar power – an important factor when arranging non-recourse finance, which is based entirely on cash flow from the project – vary enormously from country to country. Whereas in Germany solar park operators – and thus also their banks – can count on fixed remuneration for a period of 20 years, the situation in the neighboring countries is different. In the Netherlands, for example, the subsidy components remain in place only for 15 years.
The fact that the bank developed a suitable structure for each project over the long financing periods desired by WIRSOL, even in spite of these differences, is explicitly emphasized as positive by the managing director of the energy company. “LBBW always looked at things from our perspective, too, and shared our business assessment with regard to the future development of electricity prices,” remembers Dr Peter Vest. The company thus obtained maximum external financing and – as desired – spared its equity, since this money was “earmarked for developments” at WIRSOL.
The energy experts’ pipeline for new projects of this kind is well filled. And it is no longer limited to solar power, either. In July 2017, construction work for WIRSOL’s “Straubenhardt Wind Farm” project began in the Black Forest. At almost exactly the same time, the company purchased an existing wind farm in Canada. The project finance for this was also provided by LBBW again.
Since it was first established in December 2013, WIRSOL has been developing renewable energy projects. At its locations in Waghäusel, Baden-Württemberg, and Arundel in the UK, there are currently 90 employees working on the implementation of photovoltaic and wind power systems of all sizes in Germany, Britain and selected other international locations. The product range extends from solar parks and wind farms to industrial, commercial and residential rooftop systems as well as offers for private customers. The main shareholder of the company is the former SAP founder Dietmar Hopp, who is particularly involved as an investor the areas of biotech and renewable energy. More information can be found at www.wirsol.com.
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