Acciona Wind Energy Private Limited

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In November 2009, the 29.7MW wind power project, developed by Acciona Wind Energy Pvt. Ltd. under a BOO format, reached financial closure. Acciona Wind Energy Pvt. Ltd. (AWEPL), a 100% subsidiary of the Acciona Energia Internacional, S.A. (Spain) and Acciona, S.A (Spain), was implementing the 29.7MW wind power project at two villages in the district of Davangere in the state of Karnataka - Arasinagundi (13.20MW) and Anabaru (16.50MW). The aggregate 29.70MW wind power plant comprised 18 units of Vestas V82 make Wind Turbine Generators (WTGs), with each WTG of 1,650kW capacity. Acciona Wind Energy Pvt. Ltd. (AWEPL) had executed a 10 year Power Purchase Agreement (PPAs for Arasinagundi and Anabaru were executed on 17 March 2008 and 2 May 2008 respectively) with Bangalore Electricity Supply Company Limited (BESCOM) for sale of electricity at a fixed rate (no escalation) of US Cents 7/kWh (INR3.40 per kWh). The tariff from 11th year onwards would be decided by KERC (State electricity regulator),and DISCOM (State electricity distribution company) could exercise its option to procure electricity at the KERC-determined tariff, else Acciona could enter into agreement with third party. PPA was extendable by another term of 10 years if the KERC determined tariff from the eleventh year onwards was acceptable to the DISCOM. The O&M costs were expected to be around 2 to 2.5% per annum. As per Project Design Document (prepared for UN CDM registration with various assumptions), the project IRR (pre-tax) without considering CDM revenues was 11.93% and with CER revenue @9 per CER, was 13.65%. On 20 Nov 2008, both wind farms were registered by the United Nations as a joint project under the Clean Development Mechanism (CDM) system contained in the Kyoto Protocol. Thus CERs were an added revenue stream available. The total project cost was US$45.1 million (€29.6 million). Financial closure took place in November 2009. The debt equity ratio for the project was 61/39. Financing comprised a loan of US$ 27.6 million and a equity of US$ 17.5 million. The US$27.6 million (€18.1 million) loan was the biggest non-recourse single project finance operation carried out to date in the Indian wind power sector. Construction for the plants started in April 2007, and the plants had already been commissioned and were under operation - Arasinagundi (13.20MW) since June 2008 and Anabaru (16.50MW) since September 2008. The electricity generated from the project would be supplied to a common local sub-station at Hiremallaholle (owned by the state utility) using 33kV underground cables and local transmission lines, from where it would be further evacuated by the state grid. The delivery of the power plant had been done by Vestas Wind Technology India Pvt. Ltd. Vestas also had an ongoing two year O&M contract with Acciona. As per information given by Acciona this arrangement was likely to be further continued.