Puerto Rico’s first commercial wind farm secures financing
24 October 2011
By Kari Williamson
The construction financing has been provided by Siemens Financial Services and the wind farm, located in the southern municipality of Santa Isabel, is expected to begin construction in this month and be completed in September 2012. The wind farm will consists of Siemens SWT-2.3-108 wind turbines.
Mike Garland, CEO of Pattern, says: “The provision of financing demonstrates the confidence that investors have placed in both Pattern’s proven ability to successfully see projects through to completion and in Puerto Rico as a viable market for the development of renewable energy in the long term.” Puerto Rico’s Governor, Luis G. Fortuño, adds: “A year ago we set forth a comprehensive energy reform that created the necessary conditions for clean, renewable energy projects to flourish in Puerto Rico.
“Finca de Viento Santa Isabel is very much a result of that reform and we thank Pattern for sharing our commitment to diversifying our energy sources and for helping us position the island at the forefront of renewable energy development in the Caribbean region.” Pattern has entered into a 20-year power purchase and operating agreement with the Puerto Rico Electric Power Authority for all of the wind energy generated from the project.
This article is featured in:
Wind energy
The construction financing has been provided by Siemens Financial Services and the wind farm, located in the southern municipality of Santa Isabel, is expected to begin construction in this month and be completed in September 2012. The wind farm will consists of Siemens SWT-2.3-108 wind turbines.
Mike Garland, CEO of Pattern, says: “The provision of financing demonstrates the confidence that investors have placed in both Pattern’s proven ability to successfully see projects through to completion and in Puerto Rico as a viable market for the development of renewable energy in the long term.” Puerto Rico’s Governor, Luis G. Fortuño, adds: “A year ago we set forth a comprehensive energy reform that created the necessary conditions for clean, renewable energy projects to flourish in Puerto Rico.
“Finca de Viento Santa Isabel is very much a result of that reform and we thank Pattern for sharing our commitment to diversifying our energy sources and for helping us position the island at the forefront of renewable energy development in the Caribbean region.” Pattern has entered into a 20-year power purchase and operating agreement with the Puerto Rico Electric Power Authority for all of the wind energy generated from the project.
This article is featured in:
Wind energy
Pardon my excepticism, but I have seen several of these "clean energy" projects that become financial disasters.
ReplyDeleteThe essential ingredient for a financially successful wind farm is ... a strong, constant and reliable wind source, similar to the wind that exists in Denmark.
See the Wikipedia article to feel the power: http://en.m.wikipedia.org/wiki/Wind_power_in_Denmark
The problem in Santa Isabel? Its wind mojo doesn't come close to Denmark's.
So, if you want to know the real impact of this wind power project on Puerto Rico, you have to read the fine print that defines who will bear the risk of wind non-performance.
Who finances this project? Who is the lender?
Is there a government guarantee to pay the lenders if the project doesn't generate sufficient revenue ?
Who did the technical feasibility project? Who is the owner of the farm ? Large contributors of Fortuno? How much was paid to the Mayor, to the Senators & Representatives?
From my experience in corporate banking I bet there is formal or implicit unlimited guarantee from the Puerto Rico government supporting the financing of the project. Otherwise, it would have been impossible to obtain the financing from private sources.
ReplyDeleteThe same happens with the construction of new hotels. The bulk of the financing comes from AFICA bonds and have the full fledge guaranty of the Puerto Rico government. And most of the "capital" provided by the project investors comes from funds invested by the Tourism Development Company. In summary, the government ends up lending or guarantying up to 97% of the total funds invested.
Not a bad business for an investor. If the hotel is successful he wins millions of dollars. If it fails we end up paying the tab.
It seems that we have no way out in Puerto Rico. Isntead of win win it's always lose lose.
ReplyDeleteMJ