AES St. Nikolas Wind Farm near Kavarna

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In December 2008, the alternative energy joint venture AES GEO Energy, 89% owned by energy major AES (US) and 11% owned by alternative energy group GeoPower OOD(Bulgaria), signed an agreement with the government for the construction of a 156-MW St. Nikolas wind farm near the town of Kavarna, in the north-east of Bulgaria close to the villages of Bulgarevo, Sveti Nikola, Hadji Dimitar, Rakvovski and Porouchik Chounchevo, on an elevated plain approximately 3km from the Black Sea. The agreement was signed following the announcement that AES GEO Energy, on December 16, 2008, signed financing agreements for US$270 million in non-recourse financing for the project which would cost a total of US$370 million. The St. Nikolas wind farm, which would comprise 52, 3-MW turbines supplied by Denmark's Vestas, would be Bulgaria's largest wind park when fully commissioned in 2010. AES GEO Energy, which would own and operate the wind park, signed a 12-year power purchase agreement with the national power company NEK, in October 2008. AES acquired in October 2006 an equity stake in the wind power project, at the time under development by Geo Power, and set up the joint company AES Geo Energy to complete and operate the project. The partners agreed that after financial close, AES would take a majority equity ownership stake in the project company. The total project cost was estimated at US$370 million, of which US$270 million was financed through non-recourse financing. The non-recourse financing has been secured in a consortium of lenders, led by the European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC) and UniCredit Markets & Investment Banking for a 15 year term. AES had funded US$94 million for the equity as of September 2008 and covered the balance of the US$5.5 million project funding at the financial close.