A key parameter in the banks’ “models” tend to be the cuts in green electricity generation, as banking sector executives tell energypress, reflecting the “gravity” that the potential loss of revenue now has on the finances of a “green” investment.
In particular, as stated by the same sources, the banks recognize the uncertainty created in the RES market, which they attempt to incorporate into the “current” models in order to decide on the financing of a RES investment. As the same sources clarify, there is currently no question of suspending funding, however, each investment is examined on a case-by-case basis and the measures taken correspond to the “profile” of each investor.
More specifically, the approach of the banks includes a “palette” of scenarios (starting from the worst case scenario) regarding the revenue flow of the park during its operating period up to the repayment of the loan agreement, and on this basis additional measures are taken in order to compensate the risk of cutbacks but also overall the risks implied by the current market situation.
“The better we know the operators of the projects, the less restrictions we put” typically says a bank executive, thus emphasizing that a critical parameter for the financing “package” to be selected is the durability of the project in financial terms. As for the measures that the banks are considering for the time being, these range from good faith agreements to stronger commitments in terms of lending conditions, which are again examined on a case-by-case basis.
The commitments range from the tightening of financing ratios to the inclusion of a certain corporate guarantee in the final agreement signed between the investor and the bank. It is worth noting that for the time being the change of the financing factors is not considered, however it remains on the table when the landscape with the cuts will have become clear with the finalization of the relevant framework. This will practically mean more equity participation by the investor to compensate for a given risk that affects the income streams of the investment in the long term.
In any case, as reported by market sources, the lending conditions are becoming more difficult for the smaller market players, since they have smaller margins of flexibility compared to larger companies that at the same time have the possibility, through other activities in their portfolio, to maintain a stable and reliable credit profile, thus paving the way for additional financing.
Another element that stands out in terms of investment interest concerns foreign investors, where recently, as reported by competent sources, they are showing restraint in entering the Greek market, recognizing the need to first understand “what’s going on here” and in continue to proceed with investment moves.
Tags: Banks changing financing models RES due risk cuts additional guarantees investors
