The lender will provide gearing secured against the project, repayable over a term of 18-20 years for up to 85% of the project cost.

Investors may wish to consider hedging risk by way of fixed rate loans.

A drawdown facility is provided over the construction phase against certificates issued by a suitable project control Company. Typical payment terms for the projects are:

30% On exchange of contracts.
30% On completion of civil engineering works (Approx. 90 days).
30% On delivery of all materials. (Approx. 180 days).
10% On completion of works and connection to grid.

Investors may also wish to consider the merits of cross currency loans.

SECURITY & STRUCTURE

Loans will be granted to the borrower who, in turn, grants intercompany loans to the Spanish SPV (owner of the installations and connection rights). The Spanish SPV provides up and cross-stream guarantees to secure the repayment of the loan.

The overall structure for each project may vary dependant on the tax requirements of each investor, indeed there are options to roll the investment into a fund or alternative structure.