Helaba Annual Report 2016
Annual Report 2016
The renewable energy portfolio is growing

The wind of change

Helaba first provided project finance in the renewable energy sector in 1998, and since then the volume of the portfolio has swelled to more than two billion euros. But how are wind farms realised in practice with the clock ticking ever louder in the background? Highly professional partners are the answer – partners with a talent for smooth co-operation.

Powerful gusts sweep through the Kaufungen Forest: at 600 m above sea level the trees here face the full force of the wind. While they may not welcome it, their new neighbours certainly do, because this range of hills to the south-east of the city of Kassel has since last year been home to ten brand-new wind turbines. The 30-megawatt Hausfirste wind farm to which they belong was developed by ENTEGA Regenerativ GmbH, a subsidiary of ENTEGA AG, with the aid of a 60.5 million euro loan arranged through Helaba. A major project by any measure, it was completed remarkably quickly.

Proper preparation makes all the difference

Constructing a wind farm is rather like putting a jigsaw together (a very challenging jigsaw with a mind-blowing number of pieces). Even starting the approval process set out in the German Federal Immission Control Act involves assembling a whole raft of different expert reports and assessments. "Nature conservation, biodiversity, groundwater and spoil protection, emissions – it's all in there," explains ENTEGA Project Manager Peter Gevers, who also co-manages the Hausfirste facility. "The conditions to be met were particularly tough because of our wind farm's location in a protected habitat area. We had to have amphibian exclusion fencing installed by Kaufungen Forest Park staff for the whole of the construction phase, for example, with daily checks by the environmental monitoring team. This was necessary to keep roaming amphibians safe from construction traffic." The differences in altitude across the site posed a particular challenge and greatly complicated the necessary groundworks.

"Wind farm projects tend to be quite complicated. There is no off-the-shelf financing package: every project has its own unique details." Guido Engel,
Helaba Corporate Finance

Access routes were another important issue and it was of course also essential to maximise cost-efficiency, which depends essentially on wind yield, elevation profiles and the possible locations for the turbines. Obviously there is more than one kind of turbine available too and identifying which options were most suitable for the planned locations was another item on the to-do list. None of these issues proved insurmountable, however, and the pieces of the puzzle were steadily slotted into place until just one big gap in the picture remained: finance.

A challenging schedule

"ENTEGA contacted us and other potential partners in August 2015. Our bid won out and we were engaged to finance the project. The term sheet, which sets out the size and terms of the loan, was signed at the end of October," recalls Project Manager Guido Engel of Helaba's Corporate Finance unit. This signalled the start of a wave of expert inspections and assessments, as the Landesbank too needed to subject the project to thorough scrutiny given its role as sole underwriter for the project finance and lead arranger and security trustee in respect of the S-Group Sparkassen involved. "The idea was to have the loan authorised before Christmas, so we were left with a very tight schedule," says Engel.

ENTEGA has installed ten Enercon E115 wind turbines on a range of hills in the Kaufungen Forest. Their total output is sufficient to power 26,600 homes.

The S-Group Bank approached Sparkasse Marburg-Biedenkopf, Sparkasse Mittelthüringen and Sparkasse Werra-Meissner, the institutions in whose territory the proposed wind farm was to be created, and they too could hear the clock ticking. "We decided within the space of four weeks that we wanted to be involved," remembers Sebastian Finck, Project Manager at the Sparkasse in Marburg. "It's probably difficult for anyone on the outside to imagine what such a short turnaround time entails. There are literally hundreds of pages of paperwork to be completed." With the loan documents signed, the decision of all three Sparkassen to come on board as new borrowers made it possible to funnel low interest funding into the joint project finance package.

The Hausfirste project was funded with a loan of 60.5 million euros. Term: 17.5 years
metres above sea level, the wind farm is located in the Kaufungen Forest.
megawatts of nominal capacity supplied by the new facility.

Construction completed faster than expected

Work to realise the wind farm was already in full swing by this time thanks to ENTEGA's decision to use its own capital until the loaned funds became available. "It all began in the summer of 2013 with the initial planning stages but what really fascinated me was the actual construction process that commenced in 2016," reports wind power expert Gevers, who joined ENTEGA three and a half years ago. Watching the teams turn plans he drew up himself into reality on the ground was an experience the project manager found "indescribable". The Hausfirste facility, which has the capacity to power 26,600 homes, was ready at the end of last year – even earlier than planned.

The remarkably smooth delivery of the project owes much not just to the extensive experience of the project partners, but also to the atmosphere of mutual trust that was present throughout their dealings. ENTEGA and Helaba already knew each other from other ventures and Helaba's S-Group Bank supports Sparkassen across Germany at all levels of their core business as a matter of course. "They are happy to rely on us and on our expertise," affirms Engel, who coordinated matters in relation to finance and formed the link between all of the different parties involved. "We Sparkassen and our customers enjoy the benefits of the expertise and potential of an integrated full-service bank," adds Finck, who started to build up regional energy project financing activities at Sparkasse Marburg-Biedenkopf five years ago. "Realising a wind farm like this is always a challenging proposition."

"The differences in the altitude of the wind turbines posed a particular challenge and made the necessary groundworks relatively complex." Peter Gevers,
project manager for the construction project and manager of the Hausfirste wind farm

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