The challenge
The 1GW MacIntyre wind farm spans 36,000 hectares in south-west Queensland, Australia and is a landmark project for ACCIONA Energía, as it is: (i) the largest wind farm project in the Southern Hemisphere and Australia, (ii) considered one of the largest onshore wind farms in the world and (iii) the largest ever renewable energy facility designed, built, owned and operated by ACCIONA.
In November 2021 ACCIONA Energía reached out to J.P. Morgan seeking the bank’s expertise on how to best structure the financing for the MacIntyre Project. Typically, large scale renewable energy projects are structured as a project finance (PF) loan with recourse to the project special purpose vehicle (SPV) rather than having recourse to corporate risk (ie the developer).
Because documentation tends to be more exhaustive, PF deals usually take longer to be executed – sometimes it may be a few years before the financing is fully in place. However, ACCIONA Energía was looking for a flexible financing structure which could be rapidly implemented so the project could start generating profits for its shareholders within a short timeframe.
The solution
In 2022, ACCIONA Energía mandated J.P. Morgan as Joint ECA Coordinator (with HSBC), Mandated Lead Arranger (with HSBC, Santander, Caixa, Credit Agricole and ING) and Lender for the construction of the MacIntyre Windfarm Project.
The transaction was guaranteed by the Spanish Export Credit Agency Compañía Española de Seguros de Crédito a la Exportación (Cesce) and structured under its new Green Investment Policy with a corporate guarantee from the parent entity.
This transaction represents the largest amount financed to date under Cesce’s Green Investment Policy and one of the first transactions to be executed with this cover.
The transaction was signed on the last business day of the year – 30th December 2022 – a testimony to the commitment and hard work of all parties involved. The execution speed is even more impressive, only two months from when documentation was initially drafted until signed. The delivery of the transaction was made possible by leveraging J.P. Morgan’s extensive global coverage and expertise across the company’s Madrid, London, Singapore and Sydney offices, while working across varying time zones.
Best practice and innovation
The deal is innovative due to:
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The fact that it was the largest financing to date to utilise Cesce’s innovative Green Investment Policy, a product that was only launched in 2022.
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Its large and high-profile nature and its sustainability focus.
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Its tailor-made and flexible structure adapted to meet the needs of the transaction. For a project to be eligible under the Green Policy, it has to either fulfil the requirements to be considered green according to the EU Taxonomy or fall within Annex IV of the OECD Consensus which includes renewable energy, water and climate change mitigation. The MacIntyre Project was eligible under both requirements.
The MacIntyre financing qualifies as a Green Loan under use of proceeds and is aligned with the EU Taxonomy and under the rules of ACCIONA’s Green Financing Framework.
The project, rated as Category A due to its size and in line with the OECD and IFC guidelines as well as with the Equator Principles, meets the highest requirements in terms of environmental and social standards as well as monitoring.
The transaction aims to have a significant environmental and social impact. The project will generate clean electricity to power around 700,000 homes and avoid the emission of around three million tonnes of CO2.
By improving and greening Queensland’s electricity mix, MacIntyre Wind Farm will contribute to the Australian state’s decarbonisation commitments and its climate change mitigation strategy, while at the same time creating local jobs.
Key benefits
The project is a source of national pride for ACCIONA’s home country of Spain and sets a new precedent in the renewables sector. The wind farm will contribute to achieving one of the main objectives that the entire world is trying to figure out how to resolve, the decarbonisation of the planet.
