Eco2 – committed to the future of renewable energy

Project Finance International (PFI) Issue 473

The company has completed the purchase of the site at Brigg and is now working on signing up the fuel supply and the EPC contract.

The project has its grid connection, the site was bought just before year-end and it has its consents. David Williams, chief executive of Eco2, said the company would finalise its power purchase agreement (PPA) later. “It is the last thing we worry about,” he said.

Statkraft had an impressive run of providing PPAs to renewable schemes during 2011 and some banks have expressed concern about what is on offer from them in terms of ROC floors and change in law, etc. However Williams was not too concerned and pointed out that UK utilities seem to be coming back into the market. Last year, Statkraft backed the 46MW Carraig Gheal, 20MW Sixpenny Wood, 24MW RidgeWind, 35MW Pennant Wind, a 14MW REG scheme, 29MW Drone Hill (all windfarms) and Sleaford.

Banks are already being approached regarding the Brigg deal. The scheme will receive 1.5 ROCs (renewable obligation certificates) under the renewables legislation. Under the Eco2 model, the company develops the scheme and sells to a new owner, BNP Paribas Clean Energy Partners in the case of Sleaford, at financial close.

Williams said it was difficult getting bank finance for these schemes but added that it had been difficult for the last three years. On the day of Sleaford’s financial close, another deadline loomed for resolving the eurozone crisis, which caused issues for one bank.

Williams said it was even more challenging obtaining financing for its two 40MW schemes in northern Spain at Osorno and Rioja. With Sleaford now out of the way the company is refocusing on these projects as they are at an advanced development stage.