Merchant debt financing for RTB wind farm in Finland

Augusta & Co is delighted to have acted as exclusive financial adviser to Valorem, the independent French green energy producer, in an innovative transaction to raise fully merchant long-term debt for the construction of a 149MW wind farm in Finland.

AIP Management, an institutional infrastructure asset manager based in Denmark, is providing €135 million in flexible debt financing to fund the construction of the Matkussaari wind farm located in the Ostrobothnia region of Finland. The merchant debt financing will allow Valorem to participate fully in the upside potential of a rising power price whilst the flexible nature of the capital will also provide effective downside risk management. The closing of the financing is a key step in Valorem’s strategy to become a European IPP and increases their net installed capacity by 27%.

The Matkussaari wind farm forms part of the larger Viiatti project which also comprises the 165MW Kalistanneva wind farm, which Valorem has sold to a consortium of Helen Oy, and Ålandsbanken Wind Power Fund. The two projects will be constructed in parallel under Valorem’s construction management and together will generate c. 1TWh annually representing around 1.2% of Finnish annual electricity consumption.

Augusta has acted as exclusive financial adviser to Valorem on both projects, providing debt advisory services on Matkussaari and M&A advice on Kalistanneva.

Benjamin Lenclen, Head of International Project Finance and PPAs for Valorem, said “We were delighted to work with the Augusta team on two parallel transactions enabling us to recycle capital through the sale of Kalistanneva wind farm and reinvest into the landmark Matkussaari wind farm. Augusta has demonstrated a strong ability to think outside the box allowing us to deliver an equity-enhancing merchant solution.”

Romane Guitard, Managing Director and head of France for Augusta commented “This transaction represents an important step forward in the provision of debt finance for renewable energy projects on a merchant basis. We were delighted to have been able to support Valorem in a systematic review of a variety of financing alternatives and the implementation of an equity-enhancing merchant solution.”

Simon Clement-Davies
Romane Guitard
Harry Gibson