AES Solar Energy closes on €25 million non-recourse financing for first PV project in Greece

ARLINGTON, USA: AES Solar Energy Ltd (AES Solar), a joint venture between The AES Corporation and Riverstone Holdings LLC, announced that on October 20, 2009 one of its subsidiaries closed a €25 million non-recourse debt facility for the Iktinos project, a 4.3 MW photovoltaic (PV) facility located in Florina, Greece.

The loan was extended by Landesbank Baden Wurttemberg (LBBW) of Germany in several tranches including an 18 year term tranche and three shorter term tranches. The financing has been syndicated to one other bank.

When completed, the project will be the largest solar PV installation in Greece and will provide enough renewable electricity to power over 400 homes. The project is expected to reach commercial operation in early 2010. It qualifies for the favorable regulated tariff under the Renewable Energy Sources Law 3468/2006 (“RES Law”) as well as a capital subsidy to support eligible project expenditures.

“We are very pleased to reach financial close on our first Solar PV deal in Greece. The credit markets remain challenging, but this project demonstrates our ability to raise non-recourse finance, even in a market where there are few precedents for such deals. This is the successful result of combining a well-structured project with committed people on both sides of the deal. We hope to accomplish further projects in Greece in the near future,” said Robert Hemphill, CEO of AES Solar.

“The regulatory environment in Greece may be highly attractive to investors on one hand but on the other hand it is rather complex to document sophisticated financing structures. AES Solar certainly is amongst the most experienced sponsors of energy related projects in the world. In such markets it is very important to have partners who have the team and the infrastructure enabling them to deliver,” said Alexander Bagiaos, Vice President at LBBWs Project Finance Renewables division.

Polycrystalline panels manufactured by Yingli are used in the project. This financing represents the largest project financing completed in Greece for solar installations to date.