Credito Valtellinese banking Group: completed project financing to build 100-megawatt combined-cycle cogeneration power plant promoted by Atel and Radici Group
Milan, February 2, 2004 - A project finance agreement has been signed these days to raise the necessary finance for Novel spa, a project company that is 51% controlled by the Swiss Group Atel and 49% by the Radici Group of Bergamo, to build a 100-megawatt combined-cycle gas turbine cogeneration power plant. The new plant will be located near Radici Chimica's Italian production plant in Novara.
This project was made possible thanks to a debit/equity based financing of 110 million euros from a pool of banks including WestLB's branch in Milan and three banks from the Creval Group, namely Credito Valtellinese, Credito Artigiano and Credito Siciliano.
The project is the first Greenfield Co-generation IPP ("Independent Power Producer") investment based on limited recourse project finance without the benefits deriving from a Purchase Power Agreement with GRTN or CIP 6 contracts. Instead of conforming to the law currently in force in Anglo-Saxon countries, where project financing initiatives first came into being, this project will be conducted according to the Italian legislation. It will be based on tolling arrangements between Novel and the trading companies of Atel and Radici Group. Particularly, these companies will pay commissions to Novel for the conversion of natural gas into energy and steam taking market risks associated with the supply of natural gas. Novel, in its turn, will take those risks associated with energy production and efficiency.
Despite the complexity associated with a vast amount of documents, the costs for this initiative have been reduced by raising the necessary finance through project financing also for a small project.
The energy produced will be used to provide electricity (Atel, Radici Group) while the steam will be used by Radici Chimica for industrial purposes.
Built, run and maintained by Atel Group companies, the cogeneration power plant is being completed very soon. Business operations are scheduled to start in spring 2004.