Extraordinary complex situation, challenges us to be more supportive with our clients and look toward the future
COVID-19 has rapidly spread, affecting almost all countries worldwide. Latest economic consensus have shown a general and significant GDP drop, especially relevant in those markets highly dependent on external demand and/or labor-intensive sectors, like the Spanish market. As a result of the health crisis, Government has declared the alarm status, which has a wide variety of implications, many of them impacting the power sector:
• Economy lockdown has led to a relevant decrease in power demand. Combined with the commodities low-trend price observed during the weeks previous to COVID-19 crash, have resulted in historical wholesale electricity low prices.
• Pool and future markets low-price scenario are putting a lot of pressure on off-takers, who are showing a downward trend in PPA prices.
• Delay in the administrative procedures. This has an immediate impact on the development process and construction schedules for renewable energy projects affecting economic projections.
• Financing of renewable energy projects is going through an uncertainty situation which may postpone financial close but also might force financial institutions to revisit their terms and conditions.
• Renewable energy operating projects may face working capital stress situations driven by current retribution parameters as they were calculated considering a complete different pool price scenario compared to existing one.
All the above shows an extraordinary complex situation which challenges renewable energy stakeholders to move fast in order to enhance their business strategy. From Vector Cuatro, we have performed a deep dive on key drivers to provide our clients with a continuous support. Our closeness to the market through a strong network together with our wide in-house expertise, allows us to have 360 picture and enable us to become a reliable partner in the renewable energy industry.
Our M&A and Financial Advisory team is continuously monitoring market updates, factoring any input to adapt opportunity assessment. We are especially active in M&A transactions, on the sell-side helping our clients in maximizing asset value and on the buy-side advising on valuation and structuring to optimize return to shareholders.
Do not hesitate to get in touch with our team requiring any kind of support. Our M&A and Financial Advisory team would be more than happy to support you whatever your concern may be.Read More
Windfor, a company of Vector Cuatro, LTA in the refinancing of three wind farms in Italy with first green loan
Windfor, wholly-owned subsidiary of Vector Cuatro, has acted as Lenders’ Technical Advisor in the refinancing of three wind farms in Italy with first green loan. The three projects, owned by Cubico Sustainable Investment, total more than 99 MW.
As Lender’s Technical Advisor, Windfor provided Technical Due Diligence services including permitting, grid connection and regulatory fulfilment assessment, land leases assessment, equator principles assessment, energy assessment, contracts assessment, engineering assessment, tariff assessment and OPEX assessment.
The green loan complies with the Green Loan Principles and has been supported by infrastructure firm AECOM.
The 99MW portfolio comprises three operational projects located in Campania, Apulia and Basilicata (Italy), ranging from 17.5MW to 54.4MW.
The total amount of the project finance was around EUR 173 million, in which Banco Bilbao Vizcaya Argentaria (BBVA), Crédit Agricole Corporate and Investment Bank (Crédit Agricole CIB), Siemens Financial Services and Société Générale acted as structuring mandated lead arrangers. Credit Agricole CIB also acted as agent of the financing and issuing bank, with Credit Agricole Italia as account bank.
Currently, Windfor and Vector Cuatro counts on a considerable track record in the Italian market and embraces experience of more than 18 GW as Technical advisor, providing a wide range of services that include owner’s engineering services, on-site technical audits, technical due diligences, vendor due diligences or O&M tenders, among others.Read More
Colombia’s first solar and wind power auction: 1298GW awarded to 3 solar farms and 5 onshore wind plants
After almost two years of planning and one failed attempt, Colombia has successfully had its first renewables auction with long-term PPAs secured. Considering Colombia’s market with great potential, many international players, such as Acciona, Canadian Solar, Enel Green Power, EDFR, Solarpack and Trina Solar all showed interest in participating.
In this auction, seven electricity generators secured 15-year PPAs for 1298 MW of new wind and solar capacity spread over three solar and five onshore wind projects, which are planned to be commissioned by January 1, 2022.
Awarded projects in the auction
Trina Solar – San Felipe PV (90MW)
Trina Solar – Cartago PV (99MW)
Trina Solar – El Campano PV (N/A)
EDPR – Alpha wind farm (212MW)
EDPR – Beta Wind Farm (280MW)
JEMEIWAA KA’I – Casa Electrica wind farm (180MW)
Empresa de Energia del Pacifico (Celsia) – Eolico Camelia & Eolico Acacia 2 (N/A)
The average price of the contracts turned out to be COP 95.65/kWh (0.025 €/kWh), about COP 50/kWh (0.013 €/ kWh) cheaper that the usual price for bilateral supply contracts in Colombia. It also came in far lower than the maximum average tariffs allowed by the authority, namely COP 160/ kWh (0.04 €/kWh).
Out of 23 off-takers that bided in this renewable auction, 22 were picked to buy the generated power at prices far lower than the market rate
22 off-takers selected in the auction:
Electrificadora del Huila
Electrificadora del Caribe
Centrales Eléctricas de Narino
Electrificadora del Caqueta
Empresa de Energía del Putumayo
Empresas Municipales de Cali E.I.C.E.
Empresas Públicas de Medellin
Electrificadora de Santander
Empresa de Energía del Quindio
Empresa de Energía de Pereira
Centrales Eléctricas del Norte de Santander
Empresa de Energía de Boyaca
Electrificadora del Meta
Profesionales en Energía
Central Hidroeléctrica de Caldas
Empresa de Energía del Pacífico
Compañía de Electricidad de Tulua
This auction represents a significant step in Colombia’s plan to diversify its power supply. It aims to enable the country to increase its installed renewable energy capacity from around 50 MW currently to 2.2 GW in 2022, for Colombia to have an increasingly clean, modern, sustainable and environmentally responsible matrix.Read More
The company has recently closed two agreements for the management of 17 more solar PV projects totaling 35 MW. With these contracts, Vector Cuatro increases its portfolio of assets under management in Japan to a total of 470 MW.
In November 2015, Vector Cuatro announced the beginning of its activity as an asset manager in Japan for a 3.5 MW solar PV plant, owned by one of the most important companies in the Pacific energy sector. Three years later, the Spanish consultancy surpasses the 450 MW mark, already taking care of the asset management for 28 projects in Japan.
Since 2007, when the company began to operate in the Renewable Energy Industry, Vector Cuatro has been able to increase its portfolio of assets under management to 2,5 GW for operational projects and plants under construction.
Currently, the company manages solar PV and wind power plants in America, Europe and Asia, with Japan being one of its core markets. Vector Cuatro entered the renewable energy markets in Asia first in 2012 as a Technical Advisor and providing support in transaction services for solar PV plants. Since then, the Nippon delegation has grown up positioning itself as a key reference in the local renewable industry with an international client portfolio to which belong the most active banks and companies in Japan.
Besides providing asset management services and support in transactions, the company has also rendered feasibility studies, technical due diligences and consulting services in Japan for projects that total more than 10 GW.
Vector Cuatro Japan アセットマネージメント450MWを超える
最近、Vector Cuatro Japanは、17の太陽光発電プロジェクト、合計35 MWのアセットマネージメントに関する2つの契約を締結した。これらの契約により、日本の運用資産ポートフォリオを合計470MWに拡大した。
2015年11月、Vector Cuatro Japanは、太平洋エネルギー分野で最も重要な企業の1社が所有する3.5 MWの太陽光発電所の資産運用会社としての活動開始を発表した。 3年後、このスペインのコンサルタント会社は450MWを超え、すでに日本国内の28のプロジェクトの資産管理を担当している。
Vector Cuatroは、再生可能エネルギー業界で事業を開始した2007年以来、運用プロジェクトおよび建設中のプラントのアセットマネージメントのグローバルポートフォリオを2.5 GWに増やすことができた。
現在、同社はアメリカ、ヨーロッパ、アジアの太陽光発電所と風力発電所を管理しており、日本は中核市場の1つである。 Vector Cuatroは、2012年にテクニカルアドバイザーとしてアジアの再生可能エネルギー市場に参入し、太陽光発電所の取引サービスを支援した。 それ以来、日本現地法人は、国内の最も活発な銀行や企業に属する国際的な顧客ポートフォリオを持つ地元の再生可能エネルギー業界における重要なコンサルタントとしての地位を確立してきた。
The spanish multinational, Vector Cuatro, has acted as Technical Advisor in the 30 MW solar PV project Noboribetsu, developed by Renewable Japan. It is the first time that a green rating is given to a project bond.
Vector Cuatro has acted as Technical Advisor for the Noboribetsu project, a 30 MW project developed by Renewable Japan. Renewable Japan holds one of the 3 publicly listed solar funds in Japan. The project has received a preliminary rating by the Japanese rating agency Rating and Investment Information (R&I), in order to be incorporated into the fund. R&I evaluated the project and confirmed the bond issuance with GA1 level (preliminary).
In addition, this is the first project with unlimited curtailment to be successfully rated in Japan. As technical advisor Vector Cuatro performed the feasibility study and the technical due diligence, including the curtailment analysis of the project.
Vector Cuatro entered the renewable energy markets in Asia first in 2012 and has positioned itself as a key reference in the local renewable industry with an international client portfolio to which belong the most active banks and companies in Japan. Currently the company provides support in transactions and rends feasibility studies, technical due diligences and consulting services total more than 4 GW. Vector Cuatro also provides Asset management services and has topped the 400 MW mark, taking already care of the asset management of 28 projects in Japan.Read More
The company continues reinforcing its international strategy by opening an office in Sydney as a new regional hub for its activities in the Pacific. This office joins the delegations that the group has at present outside of Spain, namely in Italy, France, Bulgaria, the United Kingdom, Japan, Mexico, Chile, United Arab Emirates and USA.
From the new office located in the financial district of Sydney, the local team will render asset management services, engineering and commissioning services, technical advisory and owner´s engineering, among others. Before entering the Australian market, Vector Cuatro was already present in the Asia Pacific, providing services from its office in Tokyo. The region has been one of the key markets for the company where it has carried out more than 8 GW in technical services and currently manages renewable assetss with 192 MW of installed capacity.
The company arrives in the continent at the best moment for the development of renewable energy projects. Reaching 8.4 GW of solar and 5.1 GW of wind installed capacity by mid-2018, Australia’s renewable energy market is attracting massive interest from developers, contractors, manufacturers and both local and international investors.
As 2017 was marked as a record-breaking year for renewables in the country, with 700 MW of renewable projects being completed, a recent report of Australia National University shows that during 2018 and 2019, Australia will install around 10,400 MW of renewable energy, of which 7,200 MW will be generated from large-scale solar and wind power projects and 3,200 MW from rooftop PV systems.
In the absence of national energy and climate policy, states and territories have clear renewable energy targets and have introduced a variety of policies to drive the energy transition. If industry continues deploying new renewable capacity at current rates, Australia will comfortably exceed the 2020 Renewable Energy Target and supply 100% renewable electricity by 2030.
Currently Vector Cuatro has carried out more than 1000 projects in 43 countries worldwide and is internationally ranked as one of the most important companies in the renewable energy industry. It has over 2.4 GW of power under management, 53 GW in technical services, 4.6 GW in financial advice and counts with a track record of more than 60 GW throughout the entire value chain of the projects.
201 Elizabeth Street
Sydney NSW 2000
Falck Renewables S.p.A. signed today an agreement through its wholly-owned subsidiary Vector Cuatro S.r.l. to acquire a 100% share of Windfor S.r.l, a well-known leader in Italy in technical advisory services for wind energy. This reinforces Falck Renewables’ upward trend and strategic interest in the services sector for renewable assets.
The acquisition is expected to be finalised by September 2018 and is worth 0.625 million euros.
Through this acquisition, Vector Cuatro strengthens its offer in technical advisory services for onshore wind plants, a technology expected to continue to grow 7.2% from 2015 to 2030 globally according to the IEA.1
With over 15 years’ experience, Windfor is a leader in Italy in the resource assessment, planning, decommissioning and repowering of wind farms. Windfor has analysed over 17 GW of wind plants, performed due diligence for 9 GW and delivered advisory services in projects for 18 GW in Italy and abroad. Through hands-on experience in a wide range of projects, Windfor also developed advanced proprietary software for anemology analysis.
‘We’re excited about this agreement’, said Vector Cuatro’s CEO Javier Asensio. ‘Windfor will bring significant know-how in the wind power industry, at a time when new plants are expected to be built for over 50 GW every year until 2040, according to the International Energy Agency. On top of new plants, great opportunities will result from repowering old plants or lengthening the lifetime of existing ones’.
Falck Renewables S.p.A., listed on the Italian stock exchange in the STAR segment (“FKR.MI”) and included in the FTSE Italia Mid Cap Index, develops, designs, builds and manages power production plants from renewable sources, with an installed capacity of 970 MW in 2018 (933 MW according to the IFRS 11 reclassification) in the United Kingdom, Italy, United States, Spain and France, using wind power, solar power and biomass technologies. The Group is a global player in the renewable energy technical advisory and asset management services business, through its wholly owned subsidiary Vector Cuatro, providing asset management services to clients accounting for approximately 2.4 GW of installed capacity and with experience in more than 25 countries.Read More
Vector Cuatro has been working closely with Engie Solar to ensure the quality of Intipampa PV solar plant, located in the Peruvian district of Moquegua and with a power capacity of 40MW.
The firm has supervised the engineering design, the factory acceptant test and has carried out the quality control during the Construction phase and the Commissioning of the plant, with a mixed work team of on-site and back office staff in Spain and Peru.
Intipampa PV solar plant, owned by the French energy company Engie, through its subsidiary Engie Peru, is one of the two projects selected in the national electricity tender held in 2016. Being the second largest plant in Peru, Intipampa PV solar plant covers an area of 322 hectares. It’s expected to provide electricity to 90,000 households in southern Peru.
At the moment, Vector Cuatro has carried out more than 1000 projects in 25 countries worldwide and is internationally ranked as one of the most important companies in the renewable energy industry. It has over 2.4 GW of power under management, 4 GW in financial advice and owns a track record of 22 GW throughout the entire value chain of the projects.Read More
Last week, a group of 10-year-old kids came to Vector Cuatro, seeking enlightement and inspiration for their final project of renewable energy for school. It was a very fun and illuminating session, where several members of Vector Cuatro Spain explained the basics of Renewable Energy to 4 children from an international primary school in Spain.
In this VC Kids Talk, They learnt how a PV plant works, what thermographic camaras are used for, and they also built a handmade anemometer with recycled materials by themselves. At the end of the journey with Vector Cuatro Spain, all the employees introduced the company and explained the main functions of each department.
On June 18, our four Vector Cuatro kids presented their final project of renewable energy, demonstrating great talent and determination for building up an eco-friendly society.
Children are the world´s most valuable resource and the best hope for the future. Nothing could be more delighful than seeing the light in their eyes when explained what we can do to keep the earth energetic. We hope in the future we can organize more similar activities so we can spread out the great energy we have in Vector Cuatro!
EVENT ORGANIZED BY VECTOR CUATRO
On June 7, Vector Cuatro hosted the event ¨Present and Future of Renewable Energy in Spain”, a seminar that took place in Madrid, in which the leading exponents in the renewable energy industry gathered to talk about the development, financing and project management in the country.
During this seminar, with several specialized presentations and round table discussions, the most current topics were discussed, such as the new regulatory and financial framework for project development, legal security, the impact of renewable energy on the electricity system, and trends in asset management.
José Donoso (President of the Spanish Photovoltaic Union, UNEF) and Juan Virgilio Márquez (President of the Spanish Wind Association, AEE) opened the event as representatives, talking about the current situation and perspectives of the wind and photovoltaic sectors in Spain. Both highlighted the need for a stable regulatory framework, in order to give investors confidence and allow progress towards the energy transition.
Joaquín Monfort (X-Elio), Luis Martínez (Hive Energy), Juan López (Circle Energy) and Carlos Relancio (Cox Energy) participated in the first panel of the seminar, under the title “The New Scenario for the Development of Renewable Projects”, hosted by Hugo Álvarez (Head of Engineering Department at Vector Cuatro). The speakers pointed out that obtaining the connection point and the administrative process are the main difficulties in project development. Additionally, they discussed how the lack of “ready-to-build” projects has produced a certain price bubble andthe concern that the obligation of connecting projects awarded in auctions before 2020 may cause a shortage of supplies and increases in construction costs.
The second panel “Trends in Project Management”, had. José Benito García (T-Solar), Jordi Francesch (Glennmont Partners), Juan Manuel Fernández (Sonnedix) and Domingo Vegas (Gransolar) as speakers. In this panel, hosted by Miguel Pérez (Head of Asset Management at Vector Cuatro), the importance of seeking a flexible management model that makes sense from an economic point of view was highlighted, stressing the added value of having long-term collaborations with companies specialized in asset management.
Manuel de Vicente-Tutor (Equipo Económico) gave a presentation on the challenge of environmental taxation and renewable energy. Following, Juan Manuel Rodríguez (Red Eléctrica de España) emphasized on the challenges for the safe integration of renewable energy into the Spanish electricity system.
To conclude the seminar, Raúl Rodríguez (Engie), Josep Montañés (Banc Sabadell), David Díez (Watson Farley Williams), Carlos Rey (Foresight),) and Álvaro Pérez de Lema (Saeta Yield) discussed the investment and financing of renewable projects from different perspectives. In this panel hosted by Beatriz Llorente (Global Head of Transaction Services in Vector Cuatro) and Rafael Echegoyen (Head of Legal Services in Vector Cuatro), different models of development in the market and the possibilities of financing were discussed in first place. Subsequently, the speech focused on commercial and legal aspects of power purchase agreements (PPA). At the end of the seminar, the investments approach and expectations of profitability according to the project type were also discussed.
Throughout the day, it became clear that even though the auctions in Spain were not especially attractive regarding its profitability for investors, they served as a catalyst for the reactivation of the renewable energy sector, and for the emergence of alternative development models that were so far nonexistent in the country. Moreover, the high number of attendees, both national and international, showed the great interest companies in different fields all have in the Spanish market.
Spain is undoubtedly one of the key markets for renewable energy in the coming years. Besides the 8.5 GW awarded in the auctions, in the past months, we can see a great activity of projects development without subsidies. In addition to the new developments, Spain, with 23 GW wind energy and 5 GW solar energy, is one of the countries with the highest installed capacity in Europe.