Q-Energy, a global platform investing in renewable energy, has closed a non-recourse debt refinancing of three solar thermal plants in Spain, with a total installed capacity of 120 MW, for a total amount of EUR732 million.
Located in Andalusia, the three solar thermal plants have been operating since 2011 and have a salt storage system that allows them to produce electricity throughout the day, even at times when there is no solar resource (at night or on cloudy days), guaranteeing the supply of programmable and manageable renewable energy. Two of them are parabolic solar thermal power plants (Valle 1 & 2) and the third uses tower technology (Gemasolar).
The latter was the first commercial solar thermal power plant built in the world with central tower receiver technology and molten salt storage system, making Spain a pioneer in this technology. With a 120 MW capacity, the three plants are capable of generating 330 GWh per year, supplying energy to more than 100,000 homes.
Q-Energy acquired 100 per cent of the three plants in December 2020 from a consortium formed by SENER, a leading Spanish multinational engineering and technology company, and Masdar, one of the world’s leading renewable energy companies and a subsidiary of Mubadala Investment Company.
The financing consists of a long-term bank debt in which BNP Paribas, Sabadell and Santander have acted as Global Coordinators, Bookrunners and Mandated Lead Arrangers (MLA). The banking syndicate consists of eleven banks in total, both Spanish and international, and the insurer AXA as an institutional investor. In addition to BNP Paribas, Sabadell and Santander, the banks that complete the syndicate are: Abanca, Bankinter, CA-CIB, Caixabank, Intesa, Liberbank, Société Générale and Unicaja. AXA, CA-CIB, CaixaBankia, Intesa and Société Générale also acted as MLAs.
An interest rate derivative was also arranged with BNP Paribas and Santander as arrangers. Santander also acted as financing agent.
In line with its sustainability efforts, Q-Energy decided to bilaterally close the first ESG derivative in Spain with Santander, demonstrating both parties’ support for the transition to an environmentally responsible economy and the fight against climate change.
This transaction is the largest solar thermal financing transaction in Europe to date and is another sign of the great appetite and liquidity that continues to exist in the Iberian solar market. The large number of lenders involved in the financing is another sign of this trend. This is despite the complexity of the process, mainly due to the size of the transaction, the scarcity of deals involving this in this technology and the short period of time in which the transaction was closed.
“This transaction has been a complex process, due to the nature of the assets, the volume of debt and the large number of counterparties involved. This project opens the way for many new opportunities in the solar thermal sector and demonstrates the strength of Q-Energy’s relationship with its banks,” says Daniel Parejo, director of investments and financing at Q-Energy.
Q-Energy is currently one of the most active investors in the Iberian renewable energy market. Its historical commitment to the photovoltaic sector has now been joined by solar thermal technology, where it has acquired in recent months 5 plants with a total capacity of 220 MWp.
In this transaction, Q-Energy has been advised by Garrigues (legal documentation) and Chatham Financial (interest rate hedging). The financiers were advised by Watson Farley & Williams (legal documentation), Linklaters (tax), G-Advisory (technical due diligence), Willis Tower Watson (insurance due diligence), and Ernst & Young (financial due diligence and model audit).
As part of its corporate social responsibility policy, Q-Energy is in the process of certifying the transaction under the Green Loan Principles sustainability criteria, developed by the Loan Market Association (LMA), through an independent expert Second Party Opinion, that will be provided by G-Advisory.