Saudi Arabian company seeking EIB financing for 550 MW wind project in Spain

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The European Investment Bank (EIB) has disclosed that Alfanar Company, an industrial manufacturing and construction group based in Saudi Arabia, is seeking a EUR385 million (US$449.5 million) loan for a 547 MW wind project in Spain, with a total estimated investment of EUR643 million (US$750.8 million).

The project involves the development of 21 wind farms across the country, with turbines planned to be installed in Andalusia, Asturias, Castilla-La Mancha, Castile and León, Galicia and Navarra. The wind farms will range in generation capacity from 8 to 50 MW, altogether containing 163 turbines.

This will be one of the first greenfield renewable energy projects to be financed in Spain after the moratorium in 2012 and the new regulatory framework which came into effect in 2014.

The capacity is part of the 720 MW wind power awarded to Alfanar Company in a renewable energy auction held in July 2017. The company participated in partnership with Capital Energy, a Spanish firm, under an agreement that Capital Energy will develop the projects until the ready-to-build stage, while Alfanar will be responsible for construction and exploitation. Capital Energy has the right to convert the income from the sale of parks into the capital stock of the company vehicle of the projects.

Neither company has disclosed a schedule for the installation of the wind turbines, although the capacity awarded must be online by the end of 2019 in keeping with the terms of the auction. According to the EIB's disclosure, the proposed loan has been under appraisal since November 2017.

In June, it was reported that Alfanar had secured a power purchase agreement (PPA) for a 200 MW portion of this capacity with Swiss power company Axpo. Due to lack of confirmation from either party, it is unclear whether these 200 MW are part of the project proposed to EIB or the remaining capacity awarded in the 2017 auction.

Alfanar was also reported to be in the process of obtaining financing from Abanca, Bankia, Bankinter and Banco Sabadell. It seems reasonable to presume that this process is reaching final stages, as Alfanar will need to commence construction shortly to avoid the fines for not meeting the 2019 deadline for commercial operations.