S.A.G. Solarstrom concludes €65 million loan agreement


Having installed around 100 MWp of plants in 2011, S.A.G. Solarstrom says it intends to "considerably" increase this amount in 2012, with the help of the Deutsche Bank’s loan agreement.

While the company did not disclose the capacity it intends to install throughout the year, it said that it will use the €65 million to implement photovoltaic projects worth up to 60 MWp in Germany "chiefly" in the third and fourth quarters of this year. Projects have also reportedly been planned for Italy, though it declined to disclose any specific details.

S.A.G. Solarstrom adds that the recently announced feed-in tariff changes in Germany, and the proposed support changes in Italy have already been taken into consideration, regarding the timelines of the proposed projects.

The loan agreement’s term run until next September, and payment is said to be subject to the completion of the bank’s customary conditions. The new agreement represents the third deal struck between S.A.G. Solarstrom and Deutsche Bank in the last year.

Previously it provided the project bridging loan for the company’s 48 MWp Serenissima project in July 2011, and the long-term funding of the project in March 2012. The Serenissima plant was sold to European financial investor, BNP Paribas Clean Energy Partners, at the end of last year.

This March, at the first Solarpraxis-organized Project Implementation Conference – China 2012, held in Shanghai, Felix Holz, VP of Deutsche Bank spoke about what photovoltaic project developers need to do to obtain financing. In his view, they must first and foremost "develop a good quality project!".

In his presentation titled "Factors for successful project developers," Holz explained that in order to obtain project financing, developers must meet the requirements of every party involved, including those of a bank – something that is neglected by many when they begin to develop their PV plans.

He said that while a developer is involved for between one and three years, the relationship an investor and debt provider (bank) have with a project can last for over 20 years, and 15 to 18 years, respectively. Consequently, to better the chances of obtaining financing, a developer must prove bankability, i.e. ensure a return on investment. What banks do not like are construction, technological and development risks.