Sunday, May 26, 2024

Deloitte Legal counsels Sidenor on PPA agreement with Sonnedix

Deloitte Legal has advised Sidenor on the signing of a power purchase agreement with Sonnedix, the first long-term agreement for electro-intensive industries with the guarantee of Cesce


Sonnedix, the international renewable energy producer, and Sidenor Aceros Especiales S.A., the European leader in the production of special long steel products, have signed a 12-year renewable power purchase agreement (PPA) with a guarantee granted by the Spanish Export Credit Agency (‘Cesce’).

This is the first energy purchase agreement signed with the support of the Spanish Reserve Fund for Guarantees of Electro-intensive Entities (FERGEI). The support program was implemented by the Ministry of Industry, Commerce and Tourism in collaboration with Cesce to support Spanish electro-intensive companies with the coverage of risks derived from the purchase and sale of the supply of electrical energy.

The renewable energy supplied under the PPA will come from the solar photovoltaic plant Sonnedix Fraile, which has a capacity of 36MW and is located in Herencia (Ciudad Real, central Spain). Supply began in March 2023 and will last for 12 years.

Alongside the PPA, Sonnedix financed the solar plant with Bankinter e ICO, which acted as an interest rate hedge entity and Bondholders as an agent entity. On this operation, Bankinter Investment has advised Bankinter.

Carlos Guinand, Executive Chairman of Sonnedix, added: “We are very proud to have achieved such a special agreement; it is not only our first corporate PPA in Spain but also the first purchase agreement of an electro-intensive plant through a State-backed guarantee, which means a further step taken in terms of supporting and promoting the use of renewable energy in the country. It means we are actively participating in this change, fulfilling our role as a key agent in the Spanish energy transition. And we certainly hope to replicate this same structure with other electro-intensive customers in the country”.

José Antonio Jainaga, President of Sidenor, stated that: “With this agreement, we are taking a very important step in the decarbonisation strategy of our industrial processes through the acquisition of renewable energy. We are very proud to have signed the first agreement with a State guarantee through Cesce, and we hope this operation paves the path to other electro-intensive producers who, like us, want to progress in their ESG commitments with a long-term commitment to profitability and sustainability.”

Present in Spain since its origins in 2009, Sonnedix currently has over 1.3GW of capacity in projects under operations, construction, and various development phases. The renewable energy producer continues expanding its platform through the acquisition and development of projects in Spain and other OECD markets.

Sidenor was advised by Deloitte Legal (legal advice on the PPA) with a team formed by María Guinot Barona (partner), Leovigildo Domene (director) and Juan Felipe Cardona (associate) and Deloitte Financial Advisory (financial and accounting advice on the PPA). Sonnedix was advised by Watson Farley Williams on financial documentation of the PPA and PPA guarantee, Kental Capital and Banco Sabadell on financial advice and PPA guarantee, and Auriga on interest rate hedge. The Financial entities have been advised by ONTIER on the financial documentation and PPA guarantee, Ashurst on legal due diligence, G-Advisory on technical due diligence, Marsh on insurance, and EY on the audit of the financial model.

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