The public ground breaking activity was done by Mr. Neoklis Sylikiotis, Minister of the Interior, and in the presence of Mr. Marios Garoyian, President of the House of Representatives, Mr. Plutarchos Sakellaris, EIB Vice-President, Mr. Brian Olley, Deputy High Commissioner of the British High Commission, Thomas Rottner and Emma Collins, Managing Partner and Partner at Platina Partners, and Mr. Akis Ellinas, Chairman of DK Wind Supply Ltd. who also addressed the participants in the ceremony. The blessing was given by the Bishop of Paphos.
EIB Vice-President Plutarchos Sakellaris, whose responsibilities include the EIB’s lending activities in Cyprus as well as energy issues, stated today: “I am delighted to participate in the ground breaking ceremony of this flagship project. Orites is the largest and most advanced wind farm in Cyprus. It paves the way for further developments in the wind energy, and brings the Cypriot Government closer to its target and the EU’s objective for renewable energy production. This is of particular importance for Cyprus, whose electricity network is not interconnected and has no other indigenous energy resources. We were therefore ready to participate in a finance structure taking direct project risk. The EU objective for renewable energy will be a major challenge, as the required investment could be in the order of EUR 600-700 billion up to 2020. We at the EIB are ready to play a strong and active role in supporting the Member States’ efforts with adequate funding and tailored finance products”.
This wind power project contributes significantly to the Government’s target of producing 13% of its electricity from renewable sources by 2020. It also represents 27% of the required installed wind energy capacity of 300 MW by 2020.
The implementation of the project was mindful of environmental aspects and is based on a multi-contract approach, bringing together know-how from leading EU companies including Vestas and Siemens.
EIB financing of the Orites project was one of the elements that led Euromoney to award the “Lender of the Year” title to the EIB. The Bank is seen as a front-runner and a leader in promoting investments across the renewable energy sector. The Bank is also serving as an important example of project lending in a difficult financial climate.
EIB activity in Cyprus
EIB lending in Cyprus started in 1981. It gained volume after 1996, when the country started accession negotiations with the EU. In the following 12 years, total EIB financing in Cyprus amounted to more than EUR 1.5 billion, of which almost half was after the country’s accession in 2004. In the five-year period 2004-2008, the EIB provided a total of EUR 645 million for projects in Cyprus in support of the Union’s objectives and the Bank’s priorities. 49% of total EIB financing in Cyprus in this period was for a cleaner environment and an enhanced quality of life. Flagship projects for urban environment infrastructure, notably water and wastewater collection networks, have been financed in almost all major cities, including Nicosia, Limassol, Larnaca and Paphos. 27% of total EIB lending in Cyprus in this period was for priority combined infrastructure investments, such as the development of transport, urban and public service information technology infrastructure. 20% of total EIB financing in Cyprus was in the energy sector with the construction of new combined-cycle and internal combustion power plants in Vassilikos and Dekeleia. EUR 32 million financed projects in synergy with the Cohesion and Structural Funds. The Bank works closely with the Cypriot authorities and the European Commission with respect to the programming and implementation of projects supported by the Structural and Cohesion Funds in Cyprus, in order to maximise the impact of its action.
EIB energy financing in Cyprus
The EIB has supported a number of energy projects in Cyprus. The Bank has established a long-term relationship with the Electricity Authority of Cyprus and has been involved in the part-financing of most of the Authority’s electricity generation and network development investments. This includes loans totalling EUR 200 million for the Vassilikos electricity power plant, the largest investment ever undertaken in Cyprus and the Bank’s support for the upgrading of the electricity transmission and distribution network, for a total of EUR 130 million. A further EUR 30 million has gone to a new internal combustion engine power plant at the Dekeleia power station in the district of Larnaca in Cyprus. Initially powered with heavy fuel oil, the plant can be retrofitted to natural gas, once this becomes available on Cyprus. Electricity demand in Cyprus is rising and plants of this type provide a rapid response to load changes, which makes them suitable for generation of electricity during peak demand This will help meet demand changes in particular during the summer months, when cooling and electricity needs are highest.
EIB and Renewable Energy (RE)
For climate change mitigation, in line with the EU environmental sustainability goal of reducing CO2 emissions resulting from energy production and consumption the EIB has set RW as a priority. In 2007, it set itself a target of EUR 0.6 billion for financing RE; that target was, however, exceeded to reach EUR 2.1 billion (2007 total lending EUR 47.8 billion). In 2008 the target for RE lending was set at EUR 0.9 billion, also largely exceeded to reach EUR 2.3 billion (2008 total lending EUR 57.6 billion). With a view to continuing this process, the Bank has now further increased its energy targets for 2009 and onwards and set itself a floor for RE projects of at least 20% of overall energy projects in the EU. To date in 2009 the EIB has provided a total of EUR 1.7 billion in RE lending.
Vestas receives order for 82 MW in Cyprus
Vestas has received an order for 41 units of the V90-2.0 MW wind turbine for the Orites project in Cyprus. The order comprises supply and commissioning of the wind turbines as well as a five-year service and maintenance agreement.
The order has been placed by a Cypriot-based development company, founded by local entrepreneur Akis Ellinas, DK Windsupply Limited, in conjunction with Platina Partners, a London-based private equity group, active in the development, construction and operation of renewable energy projects across Europe.
“With this order, we are further developing Vestas’ existing business relationship with Platina Partners in Europe. Moreover, we are taking a first big step in the Cypriot wind energy market with our V90-2.0 MW wind turbine which has a large track record in Europe,” says Juan Araluce, President of Vestas Mediterranean.
The Orites project will be located in a mountainous area in the southwestern part of the island, close to the city of Paphos. The Vestas wind turbines are the first wind turbines to be installed in Cyprus. According to the EU targets1 Source: http://www.ecx.eu, the island has to reach the target of 13 per cent renewable energy in the electricity consumption by 2020.
Delivery of the turbines is scheduled to start during the fourth quarter of 2009, and commissioning is expected to be completed in the summer of 2010.
With a total installed capacity of 82 MW and an estimated annual production 128 GWh, the wind power plant will save the environment from almost 100,000 tons of CO2 emissions. Furthermore, the wind power plant will cover the annual electricity consumption of approx. 25,000 Cypriot households.
The above order does not affect the Vestas Group’s expectations for 2009, cf. company announcement No. 9/2009 of 28 April 2009.
The order situation is slowly starting to improve for Danish wind turbine maker Vestas, its investor relations chief Peter Kruse said on Friday.
"Things are slowly starting to move", Kruse told after the company announced an order from Cyprus for wind turbines with capacity of 82 megawatts.
Some analysts expect Vestas to cut its guidance for the full year 2009 because of a shortfall of orders.
Kruse said that some of a 165-megawatt Belgian offshore order that the company announced on Thursday would be booked in 2009.
Platina secures financing for Republic of Cyprus’ first wind farm
Platina Partners LLP (“Platina”), a private equity fund advisor specialising in renewable energy and buyouts in turnaround situations, announces that financing has been secured for the €170 million, 82MW Orites wind farm project in the Republic of Cyprus. The project will be the first ever wind farm on the island.
The project has a capacity of 82MW in its first phase, with approved capacity for 140MW when complete. Once operational, the first phase will constitute 8 per cent of the island’s electricity generation capacity. Orites, the first private sector power project on the island, is also the first to benefit from the new 20 year fixed rate tariff that has recently been approved by the Government of the Republic of Cyprus and the European Commission.
The wind farm is located on the Orites Mountain, in the South West of the Republic of Cyprus, 30km from Pathos, and will consist of 41 Vestas V90 2MW machines spread over a 16 Km2 site.
Construction is expected to begin in September 2009, with operations scheduled to start at the end of 2010.
With this investment, Platina has now financed over 200 MW of wind and solar projects and continues to develop additional projects within its pipeline of over 1000 MW across Europe. Platina is involved in over 20 wind energy projects at various stages of development across Europe and it intends to finance a further 150 MW of renewable energy projects from its development portfolio during the course of 2009/10.
Emma Collins of Platina Partners said: “The financing of this project is an important milestone in the continuing expansion of Platina’s development portfolio. The predictable nature of the project’s cashflows demonstrates that even in tight credit markets there is always debt available for the best projects.”
Debt financing with an 18 year repayment profile for the project has been arranged by Commerzbank, ING and NordLB, with EIB providing 50% of the debt funding under a conventional project finance structure. Norton Rose managed all the due diligence work and acted as lenders’ counsel, with Hunton and Williams acting for Platina.
Heiko Ludvig of Nord LB said: “Delivering the first of its kind in any country requires strong support from the government to ensure that appropriate frameworks are put in place to encourage private sector investment. The Government of the Republic of Cyprus has delivered an excellent support scheme which should encourage further projects on the island.”
Michael Scheepens of ING Bank said: “Providing debt finance for the first renewable energy project in a country is always an exciting challenge and we are delighted to have been able to participate in this project.”
Christian Renke and Christian Schultz of Commerzbank, the agent and account bank for the project, said: “We are delighted to support Platina in the financing of this project and recognise that the technical and financial skills of the Platina team ensures that they deliver well structured projects.”
Emmanouel Marroulakis of the European Investment Bank (EIB) said: “Providing financing for the first renewable energy project in the Republic of Cyprus is exactly in line with the EIB’s strategy of tackling climate change through the promotion of renewable energy projects. We are delighted to support this project and enable the Republic of Cyprus to take a major step in meeting the Government’s 2010 Renewable Energy Sources Action Plan, which is in line with the EU Renewable Electricity Directive.”
Minister optimistic over renewable energy targets
THE GOVERNMENT supports all efforts to promote renewable energy sources with great generosity and remains optimistic over the state’s ability to attract investors for the Commerce and Trade Ministry’s “big plan”.
This was the message from Commerce Minister Antonis Paschalides at a media conference to present the state’s renewable energy plan to potential investors.
The event saw Paschalides showcase the state’s plans for production of solar, wind and solid biomass energy.
“We are opening up new horizons as far as discovering new energy sources,” he said.
The EU has a list of indicative aims for Cyprus on renewable energy sources (RES), which include the increase of electricity from RES from one per cent to six per cent by 2010 and doubling the production of RES from 1997’s 1.9 per cent to 3.8 per cent by 2010
The Head of Commerce Ministry’s Energy Department, Solon Kassinis said that the only area in which Cyprus is lacking is over the production of electricity.
“We believe that if wind power parks in Paphos, Larnaca and Famagusta are completed, we be soon increasing electricity production [from RES] to eight or nine per cent,” he said.
Other EU energy aims for Cyprus include cutting 20 per cent of energy consumption by 2020 and a 20 per cent decrease in CO2 emissions based on 1990 figures.
Cyprus must also increase the percentage of RES in total energy production to 13 per cent and increase the use of bio-fuels in cars to 10 per cent by 2020.
Environmental Commissioner Charalambos Theopemptou expressed his optimism that investors will back the energy plan.
“We might be facing some setbacks regarding the difficulty in building wind generators but as soon as they are in place we are ready to proceed in achieving our goals.”