Abengoa SA considering selling as much as 1 billion euros ($1.4 billion) of bonds to finance more installations and reduce its dependence on banks

Advertisement

Abengoa SA, Spain’s largest developer of solar-thermal power plants, is considering selling as much as 1 billion euros ($1.4 billion) of bonds to finance more installations and reduce its dependence on banks.

The engineering company may look to debt investors after winning government approval this month to charge a premium rate for power produced by 10 plants that will be built through 2013, Chief Financial Officer Amando Sanchez said in an interview.

“The capital markets are a reasonable option and may be easier right now than bank financing” for some of the plants, he said from Seville, Spain, where Abengoa is based. The amount the company may seek from investors is undecided, Sanchez said.

Banks have tightened lending standards amid concern over losses from the subprime mortgage crisis, spurring companies to seek funds elsewhere. Clean-energy projects in Spain and Germany can attract financing because both guarantee above-market rates for power generation that reduces dependence on fossil fuels.

Syndicated loans, or debt arranged by a group of banks, declined 42 percent in Europe this year to $578 billion compared with loans made in 2008, data compiled by Bloomberg show.

Abengoa has largely used loans for financing, accumulating 2.6 billion euros in debt backed by projects and 2.6 billion in corporate loans, according to a presentation released by the Spanish securities regulator on Oct. 29.

In addition the company led by Chairman Felipe Benjumea this year carried out its first bond sale, raising 500 million euros in two transactions in public debt markets. After selling 9.625 percent notes in November, bonds accounted for 25 percent of total debt funding, the chief financial officer said.

More on this article

Source: Bloomberg

Announcement from our Chairman, David C BarclayThe World Renewable Energy Association are delighted to announce the launch of a brand-new initiative exclusively for its members. The Renewable Energy Finance Hub has been launched following the largest survey undertaken with UK businesses conducted by WoREA in conjunction with the UK Government and its partners. Reduce your businesses carbon footprint today and begin your journey towards net zero!