Yunlin offshore wind farm secures extended financing

ECA-backed lenders and sponsors to Yunlin have stumped up €1.7 billion of new debt and equity to prevent the collapse of the scheme. The project was expected to run out of cash entirely by the end of last week if the deal wasn't completed. The €2.7 billion syndicated project financing closed in 2019 but has been beset by delays, cost overruns and construction defects. The financing is covered by European ECAs Atradius, Euler Hermes, and EKF. 

Under the preliminary deal hatched between a working group of 12 lenders and the company’s sponsors, lenders will provide the company with the New Taiwan dollar-equivalent of €500 million of new money under a super senior loan facility. Four sponsors, of which the majority shareholder is Skyborn Renewables, have provided up to €1.2 billion in the form of a mix of shareholder loans and/or a direct equity injection. At least three quarters of the banks are supportive of the deal. 

One aim of the deal is to release funds that are undrawn under its existing bank facilities but which they are contractually “draw stopped” i.e. prevented from accessing under clauses in the debt documents due to unanticipated liquidity shortfalls. The group has six draw-stopped facilities that could release around €145 million and NTD 3.28 billion of liquidity.

As part of the proposed restructuring, the maturity of six “base facilities” will be extended to December 2044 from May 2037. One commercial standby facility will be extended to December 2054 from May 2037. The six undrawn facilities will keep the current maturity date of May 2037. The restructuring entails a complex re-tranche of the debt. The new facility will have super senior priority. However, in order to incentivise lenders to participate in the new money, they are being offered the ability to increase the priority of their existing debt.