Etrion refinances Italian solar plants for $235 million

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Switzerland’s solar power developer Etrion has announced today the completion of a €222 million ($235 million) refinancing deal for the majority of the solar power parks it owns and operates in Italy.

The developer leveraged a portfolio financing package comprising long-term, non-recourse bank debt and project bonds to complete the refinancing, which Etrion CEO Marco A. Northland claims will result in "a significant increase in annual cash distributions" from its Italian projects.

Details of the deal revealed that six out of seven of Etrion’s solar parks in Italy were refinanced, ranging from 10 to 17 MW plants and comprising 53.6 MW of cumulative capacity. Etrion currently has 60 MW of solar PV capacity in Italy.

To complete the deal, Etrion formed an Italian holding company that will oversee all tax, accounting and reporting from 2016. This will allow for considerable tax savings across the portfolio, the company claims, while the procurement of new senior financing via three separate floating loans, bonds and debt services will deliver the funds.

The completion of the deal means that all previous outstanding project debts and loans are canceled, and related interest rate hedges released. New contracts outlining revised interest rate terms have been drawn up and signed.

Etrion calculates that the refinancing package will deliver a 76% increase in its expected annual Italian cash distributions, rising from a run rate in 2014 of €4.5 million to approximately €7.9 million per annum. Renegotiated O&M contracts are expected to save the firm some 40% of outgoings, Etrion added.

The developer’s bottom line was hit in August by the weakness of the euro, causing a first-half net loss of $10.1 million. Etrion has since expanded into more international markets, chiefly the high-cost location of Japan, where it has made its first power sales.