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BBVA expands its renewable energy interests in the United States
12 October 2009
BBVA has so far committed some 700 million dollars in North America to finance a large number of renewable energy projects with the main companies in the sector (Shell WindEnergy, Acciona Energía, British Petroleum, E.ON, Florida Power & Light, EDF, etc.). In all, since it made its first moves in the market in 2005, BBVA has either structured or participated in the financing of nearly 14% of the installed wind capacity in the United States. The specialized magazine Infrastructure Journal puts BBVA in second place in the financing of wind farms in the U.S. at the end of 2008.
Meticulous syndication strategy
Fowler Ridge, owned by BP and Dominion Resources, is one of the most representative wind project finance schemes in the United States in 2009 due to its complex structure, market conditions and the importance of its sponsors. BBVA has been able to access the debt market in the midst a major crisis through a meticulous syndication strategy involving direct contacts with the group of investors in the Iberian market that has led to the deal being significantly over-subscribed. BBVA committed 50 million U.S. dollars and was finally assigned 34 million.
BBVA and the boost to renewables
Through the new economic stimulus package, the U.S. Department of Energy (DOE) is implementing a Loan Guarantee Program for a number of objectives, including promoting the use of renewable energies. Although details of this program have not yet been finalized, the government is expected to guarantee up to 80% of the debt of those renewable assets that comply with certain requirements. This new government initiative comes on top of existing ones, such as tax incentives or the obligation on some states to generate a minimum amount of clean energy (the Renewable Portfolio Standards).
In order to take advantage of the opportunities created by the DOE Loan Guarantee Program, BBVA has taken up a position as financial advisor for energy companies who want to use this new lending tool.
Thanks to the interest of some clients, one of the major electricity companies in the country has given a verbal commitment to act as advisor and guide their participation in the DOE Program. This commitment will play a key role for BBVA for one of its biggest clients in North America and for the Obama administration's new program, thus consolidating BBVA’s leading position in the renewable energy market in the United States.
