Post by
Possibleidiot01 on Sep 19, 2023 7:16am
Baltic Power $5.2 Billion financing
5% doesn't seem like expensive money to get this project built.
Seems like company has provided clarity on the future financing of this project by the use of "SECURED"
Baltic Power has entered into interest rate hedges that cover the full loan amortization period and provide an effective all-in interest rate of approximately 5 per cent. In addition, Northland has entered into currency hedges to stabilize the Canadian dollar equivalent for the majority of its projected distributions through 2038 and will enter into additional hedges on an ongoing basis, in line with the Company’s risk management strategy. Baltic Power’s major supply and construction contracts are denominated in Euros to match the currency of financing, with 95% under fixed price contractual structures.
Northland has been co-developing Baltic Power with Orlen, since acquiring a 49 per cent equity stake in the project in 2021. The project financing amount of $5.2 billion represents 80 per cent of Baltic Power’s $6.5 billion projected total capital cost (inclusive of contingencies).
The remaining capital will be contributed by the project partners at financial close and has already been "SECURED"
Northland’s share of equity for the project was fully secured through the green hybrid bond issuance in June 2023 and existing corporate liquidity. Northland’s interest in Baltic Power is expected to generate a five-year average Adjusted EBITDA (a non-IFRS measure) 1 of approximately $300 to $320 million and $95 to $105 million of Free Cash Flow (a non-IFRS measure) 1 per year once operational, delivering significant long-term cash flow for the Company’s shareholders.
Comment by
BayWall on Sep 19, 2023 8:39am
Sweet deal: 25 year contract. -- Euro-pegged and "inflation-indexed" Contract for Difference (“CfD”) revenue arrangement with the Government of Poland.