A New Financing Model? Solar Millennium Launches Project-Specific Fund
Is it that hard to get bank financing? That’s one question raised by the release issued yesterday by German solar power developer Solar Millennium, in which it announces that it seeks to raise €48 million ($72 million) to support construction of the 50-megawatt Andasol 3 parabolic trough power plant in Southern Spain.
Solar Millennium says potential investors can “expect[s] an average annual return of 8 percent over the life of the investment.” Investor money will actually be funneled to a special purpose company poised to control a 13 percent stake in the Andasol 3 solar power project.
The call for investors by Solar Millennium is unusual in as much that most companies tend to issue press releases once they’ve secured the investor money, not before. Also, most clean energy projects are funded using a combination of company equity and none-recourse financing, rather than by investors, who directly carry project-specific risks.
Andasol 3 is the third installment of the Andasol solar project, located in southern Spain’s Andalusia region. Each unit generates 50 megawatts of electricity. Andasol 1 came online a year ago. Andasol 2 and 3 are scheduled to go live in 2011.
Separately, in the U.S., Solar Millennium is working with Deutsche Bank to raise as much as €4 billion ($6 billion) to finance construction of thermal power projects across U.S. Southwest.
