Genniea draws down Necochea wind farm debt
On 15 January, Genniea met conditions precedent on a $51 million DFI/ECA-backed loan to fund development of the 38MW Vientos de Necochea wind project in the Buenos Aires province Argentina.
The $62 million wind farm is backed by a PPA awarded by Cammesa under round one of the Argentinian renewable procurement programme RenovAr (RenovAr 1.5).
Closed on 2 August 2019, the borrower is SPV Vientos de Necochea, a 50/50 joint venture between Genneia and state-run Centrales de la Costa Atlantica. Dutch development bank FMO will put up the 15-year facility, which comprises an FMO A loan partially guaranteed by EKF; and an FMO B loan guaranteed by EKF from year five to term. FMO and SMBC were co-arrangers on the deal
Vientos de Necochea's funding mix echoes YPF's recent 120MW Canadon Leon wind farm financing in Santa Cruz, which proves DFI and ECA debt is currently key to getting such deals across the project finance line. Given Argentina's economic situation and the recent change in government, which gave the presidency to Peronist Alberto Fernandez, project lenders risk appetite for the country is waning, with some New York bankers not even willing to invest in the country in the near future.
Multilateral developments banks are still filling the majority of the funding gap. In September 2019, DFC approved $230 million in loans for two AES Corp wind farms under construction for example. And German development bank KfW also financed a 141MW Genneia wind portfolio in Patagonia last summer. But ECA support is growing in the country, especially European ECAs, as they provide significant comfort for commercial lenders.
