EKF wind power financing- Case: Korea - Kromann Reumert
EKF wind power financing- Case: Korea - Kromann Reumert
EKF wind power financing- Case: Korea - Kromann Reumert
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<strong>EKF</strong> <strong>wind</strong> <strong>power</strong><br />
<strong>financing</strong>-<br />
<strong>Case</strong>: <strong>Korea</strong><br />
November 2012<br />
<strong>EKF</strong> - Jørgen Kragh
Agenda<br />
Who is <strong>EKF</strong><br />
<strong>EKF</strong>’s exposure to <strong>wind</strong><br />
Wind exposure in <strong>Korea</strong> (case)<br />
<strong>EKF</strong> and <strong>financing</strong>/funding
Who is <strong>EKF</strong>?<br />
The Danish Export Credit Agency<br />
We are owned and guaranteed by the<br />
Danish Government<br />
Insures against risks related to <strong>financing</strong><br />
of export- and investment projects<br />
Operates on commercial terms and<br />
conditions<br />
Supports and supplements private sector<br />
lending<br />
AAA-rated, sovereign risk cover
SLIDE 4<br />
Exposure, end of 2011<br />
7%<br />
4% 4% 1%<br />
Wind Energy - 48%<br />
Cement - 16%<br />
7%<br />
Ships and ports - 13%<br />
48%<br />
Infrastructure and supply - 7%<br />
Oil and gas industry - 7%<br />
13%<br />
Agricultural and food technology - 4%<br />
Manufacturing industry - 4%<br />
16%<br />
Other - 1%<br />
The total exposure administrated by <strong>EKF</strong> was approx. EUR 9.3 bn. in 2011<br />
(EUR 7.5 bn., 2010) and <strong>wind</strong> accounts for approx. EUR 4.5 bn. (EUR 3.0<br />
bn., 2010).
SLIDE 5<br />
<strong>EKF</strong>’s <strong>wind</strong> world<br />
Project financed<br />
Buyer credit<br />
SBK (Soft loans)<br />
L/Cs, bonds or<br />
payment guarantees
<strong>Case</strong>: Youngduk Wind Power -<br />
<strong>Korea</strong><br />
Project: Youngduk Wind Power, <strong>Korea</strong><br />
First non-recourse financed <strong>wind</strong> <strong>power</strong> project to reach financial close<br />
in Asia (excl. Japan/Australia)<br />
Size: 39,6MW (1,65MW 24 Unit)– Vestas(NEG-Micon)<br />
Sponsor: Unison Co, Ltd<br />
Finance closing: 2005<br />
Senior <strong>EKF</strong> debt: EUR 26m<br />
Banks: BNP-Paribas, Singapore<br />
Tenor: construction + 7 years´ repayment<br />
Supply: 20,000 houses per year.
<strong>Case</strong>: Gangwon - <strong>Korea</strong><br />
Project: Gangwon Wind Power, <strong>Korea</strong><br />
Size: 98MW (2,0MW 49 Unit)– Vestas<br />
Sponsor: Unison Co, Ltd<br />
Finance closing: 2005<br />
Senior <strong>EKF</strong> debt: EUR 36m<br />
Banks: BNP Paribas, Singapore<br />
Tenor: construction + 8,5 years´ repayment<br />
Supply: 50,000 houses per year
SLIDE 10<br />
The financial markets<br />
Banks take on smaller amounts of risk per project<br />
More banks around the table<br />
Financing takes longer time<br />
Availability of long-term funding is a challenge
11<br />
<strong>EKF</strong> and Financing<br />
Risk Sharing with the bank<br />
– The bank acting as arranger<br />
– PF due diligence process in co-operation with the bank<br />
– Rank pro rata/pari passu with the bank<br />
– Max. 80% /95% of senior debt (Offshore less)
CHALLENGES AND SOLUTIONS / 03 MAY 2011<br />
SLIDE 12<br />
Export Loans/ELO Funding
SLIDE 13<br />
Export Loans/ELO Funding<br />
Export Loan Scheme (ELO)<br />
An alternative to bank funding<br />
Long tenors - up to 18 years for renewables<br />
Funding in multiple currencies<br />
No limits to funding amounts – except the limit in our<br />
guarantee
CHALLENGES AND SOLUTIONS / 03 MAY 2011<br />
SLIDE 14<br />
PensionDanmark<br />
& PFA – Funding.<br />
Direct lender in<br />
the transaction.<br />
DKK 20 bn total<br />
with minimums<br />
of DKK 250 m.<br />
<strong>EKF</strong> guarantees<br />
PensionDanmark<br />
100 per cent.
ECA’s role<br />
-Funding and risk<br />
100% Guarantee<br />
Pension fund<br />
Bank A<br />
Bank B<br />
Funding<br />
Buyer/<br />
SPV<br />
Payments<br />
Supplier
PF Banks in <strong>EKF</strong> Offshore transactions<br />
SLIDE 16<br />
Banks<br />
Q7/PAW<br />
BNP<br />
Rabobank<br />
Dexia<br />
BTMU<br />
HSH<br />
NIBC<br />
Bel<strong>wind</strong><br />
Raboban<br />
k<br />
Dexia<br />
ASN<br />
EIB<br />
Investment EUR 383 M EUR 614<br />
M<br />
C-Power<br />
Rabobank<br />
KBC<br />
SG<br />
KFW-Ipex<br />
Commerzban<br />
k<br />
Dexia<br />
ASN<br />
Euler Hermes<br />
EIB<br />
Meer<strong>wind</strong><br />
KFW<br />
BTMU<br />
Commerzban<br />
k<br />
Dexia<br />
KFW-Ipex<br />
Lloyds<br />
Santander<br />
Siemens<br />
Bank<br />
North<strong>wind</strong><br />
ASN<br />
Rabobank<br />
ING<br />
KFW-Ipex<br />
Fortis<br />
Belfius<br />
EIB<br />
ONDD<br />
GIEK/MTI<br />
PensionDanmar<br />
k<br />
EUR 1.300 M EUR 1.274 M EUR 852M<br />
Closed 2006 2009 2010 2011 2012<br />
Exporter Vestas Vestas Re<strong>power</strong>/LM Siemens Vestas<br />
Size 120 MW 165 MW 295 MW 288 MW 216 MW<br />
<strong>EKF</strong> Senior<br />
Debt cover<br />
25% 45% 5% 32% 33%
Consensus Rules<br />
General Project<br />
Financing<br />
Renewables<br />
Financing<br />
Renewables<br />
Financing > 12 years<br />
Term, base case =< 14 years =< 15 years =< 18 years<br />
Term, if ECA >50% and High<br />
Income OECD country<br />
Not allowed =< 15 years =< 18 years<br />
Weighted Average Life, base case =< 7.25 years Not applicable =< 9 (11) years<br />
Weighted Average Life, if ECA >50%<br />
and High Income OECD country<br />
Not allowed Not applicable =< 9 (11) years<br />
Payment period =< 6 months =< 6 months =< 12 months<br />
Grace period (until first repayment) Up to 24 months Equal Prin. Pmt. Up to 12 months<br />
First repayments > 2% Equal Prin. Pmt. > 2%<br />
Maximum repayment =< 25% Equal Prin. Pmt. =< 25%<br />
Interest Period 1, 3, 6, 12 months 1, 3, 6 months 1, 3, 6, 12 months<br />
• High Income OECD countries includes 25 countries in Europe, North America and Austral-asia<br />
• In the case of project <strong>financing</strong> in High Income OECD countries, the total ECA cover on the project <strong>financing</strong> may not exceed 50% of the<br />
loan syndication with private financial institutions, and ECA cover must be on a pari passu basis<br />
• All the indicated Term-periods are measured from the time of completion/commissioning. The latter depends on the supplier’s contract<br />
obligations<br />
17
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