VTB Bank, Gazprombank, and Sberbank Will Finance a Wind Energy Development Fund Project in Rostov Region

10 November 2020

VTB Bank, Gazprombank, and Sberbank signed loan security documentation with the Wind Energy Development Fund in Rostov Region as part of a deal to extend financing to construct the Kazachya Wind Farm, with a capacity of 100 megawatts, in Rostov Region. 

The banks will provide a syndicated loan to the project development organization, the Wind Energy Development Fund (a joint investment fund created under conditions involving parity between PJSC Fortum and the RUSNANO Group. This is the first syndicated loan in the renewable energy market, which substantiates the interest that investors have in the industry, and expands the opportunities to finance these kinds of projects. 

The Kazachya Wind Farm has an installed capacity of 100 megawatts. The plant’s first phase (50 megawatts) is slated to begin operations in the fourth quarter of 2020, and the wind farm will be fully commissioned by the fourth quarter of 2021. 

The project is being put in place using the principles of project financing, and involves extending loans backed by future cash flows under contracts to provide the plant’s output to power generation facilities that function using renewable energy sources. 

“In 2020, companies that belong to the Wind Energy Development Fund reached a steady pace for implementing their ambitious investment program, which stipulates the construction of 1,823 megawatts of wind power by 2024. Financing a project in Rostov Region by leading Russian banks demonstrates a high level of trust, and that our success is being recognized. In addition, our partnership attests to the attractiveness of renewable energy for financial institutions, and serves as a guarantee that the renewable energy industry in Russia will be developed sustainably,” commented Mario Matsidovsky, the Vice President for Finance at Fortum and the Deputy General Director for Finance and Corporate Affairs at Vetroenergetika Management Company. 

“VTB has been successfully cooperating with the Wind Energy Development Fund since its inception, providing optimal financial solutions to implement an ambitious program to build wind farms within the framework of the CSA RES (capacity supply agreements for RES generation facilities) program. One of the main priorities for VTB Bank is to support renewable energy projects, and we are glad that our cooperation with the fund allows us to actively develop this area of focus in Russia,” commented Dmitriy Kovrizhnykh, the Director of the Energy Directorate and a Senior Vice President at VTB Bank. 

“Gazprombank actively participates and is expanding its expertise in area of lending to alternative energy sources. The syndicated financing transaction cinched for the wind farm in Rostov is a vivid example of developing effective mechanisms for financing projects in the field of renewable energy. It is important to note that cooperation between banks and the Wind Energy Development Fund will, among other things, foster the development of localizing the manufacture of equipment in Russia,” said Ilya Devichenskiy, the Director of the Energy Directorate and Managing Director of the Department of Project and Structured Financing. 

“We are glad to enter the next stage of cooperation with the Wind Energy Development Fund. Sberbank has already financed the construction of wind farms in Rostov Region, and thanks to new investments the region will become one of the largest producers of clean wind energy in Russia. Financing renewable energy projects is one of the top-priority areas for Sberbank, we see huge potential for interacting with the fund, and plan to implement the expertise that has been accumulated to provide support to similar projects in the future,” said Olga Kharlamova, the Vice President and Director of the Key Client Lending Department at Sberbank. 

“Forming a syndicate that involves leading Russian financial institutions to finance projects for the Wind Energy Development Fund is proof that the basic principles laid down as the cornerstone for the program to give support to developing renewable energy have been put in place. These principles permit all participants in the renewable energy industry to make well-balanced decisions that take into account their own investment strategies and risk assessments. Interest in the renewable energy industry in Russia is clearly growing, and a full-fledged ecosystem of the industry will allow us to continue to develop green energy confidently,” stated Alisher Kalanov, director of the Renewable Investment Division at RUSNANO Management Company LLC.

Reference

The Wind Development Investment Fund was established in equal partnership by Fortum and RUSNANO. The Fund is managed by Vetroenergetika Management Company LLC, owned in equal parts by its partners. The Fund won the right to build wind farms with a capacity of almost 2 GW in a competition aimed at selecting investment projects for building power generating facilities based on renewable energy sources. The wind farms are expected to start operating in the period from 2019 to 2023.