IDB Invest provides financing to 207 MW wind project in Brazil

IDB Invest has provided a Total Credit Guarantee of R$125 million (US$33 million) to fully cover the debentures issuance for the financing of Santa Vitória do Palmar, a 207 MW of capacity wind farm located in Rio Grande do Sul, in southern Brazil, and operational since the end of 2017. The project has been developed by Atlantic Energias Renováveis S.A., an equity platform fully owned by Actis.

The facility consists of the construction of 12 adjacent wind farms with 69 wind turbines totaling to 207 MW. The wind scheme increases energy security by generating, on average, 935,000 MWh per year, and benefits the environment by displacing approximately 400,000 tons of carbon dioxide equivalent emissions per year (8 million tons during the 20-year useful life of the project).

To support the financing of the R$1.4 billion project (US$375 million), R$105 million (US$28 million) of debentures were issued in the local market. IDB Invest provides a Total Credit Guarantee for the debentures issuance, that, in addition to covering the principal and interest payments of the bondholders, it includes an additional margin to the holders of debentures, as well as a cushion to protect covering the possible payment of fluctuations in inflation, during the life of the debenture. The TCG produces the effect of significantly lowering the cost of the issuance, increasing the tenor up to 13.5 years and increasing appetite from the market. In addition to the debentures, the financing of the project was completed with a R$680 million (US$182 million) long-term loan from Banco Nacional do Desenvolvimento and Banco Regional de Desenvolvimento do Extremo Sul, as well as R$635 million (US$170 million) in equity and cash generated during construction.

The settlement of the bonds took place on July 31, 2018 and raised up to five times more the amount required. The issuance wrapped by IDB Invest’s TCG has been rated AAA by Fitch.