BraindumpMeeting Discussion on Renewable Energy Projects and Financing
Summary:
- Discussion on the introduction of participants from various companies involved in renewable energy projects.
- Overview of Eurus Energy Europe, highlighting its capacity of more than 5 gigawatts and presence in 16 countries, including Poland.
- Introduction of two projects in Poland: Zois and Zephyrus, incorporating PV and onshore wind components.
- Financing structure will be based on agreements in either Polish zloty or euros, with different stages of construction and operational readiness discussed.
- PPA strategy outlined, expressing preference for corporate off-takers and securing volumes for financing needs.
- Technical specifications and requirements for turbines discussed, with a focus on supplier reliability and history.
- Plans to share NDA and begin working on further project details and financing structure.
Content:
Hello, how are you doing? Good. Good. Yeah, a bit strange because today is my daughter's last day at elementary school. Oh my God, what a milestone. Thank you, yeah. Yeah. So, special day. Yeah. Hello, good morning. Can you hear us? Yep, you can. Can you hear us? I'm fine. Can you hear us? Yes. Okay. Shall we wait for Katayama-san to join? Yeah, this previous meeting is taking a bit long. Yeah. I'll ask him if we should wait. Okay, thanks. Based on my invite, yeah. Okay. Hello, good afternoon. Hello, good afternoon. Hi. Hello. Thank you for the meeting.
We appreciate the opportunity to introduce the company, our project, and discuss about potential cooperation. We will start from short introductions. On our side, we still wait for our project to join us in a few seconds. Okay, so maybe we should wait, yes? Okay, we can start. Okay, we should wait for a few seconds. Maybe I will start here, ready? Sure, yeah. My name is Katayama, I'm the sales manager, and I joined the company in September last year. Hi, my name is Toshi, I'm the business development team here at Tiers. I mainly focus on business development in Bulgaria, but I'm also supporting the quality team as well.
I'm based in Amsterdam, nice to meet you. Nice to meet you. Yes, hi, my name is Emilia Moszka. I'm based in Poland and my scope is the development of all onshore and PV projects. I'm bringing to the projects actual design. So, yeah, nice to meet you. Nice to meet you. Okay, Matheus. Hello, good morning. My name is Matheus. I live in Spain. I'm looking into the payments in charge of taking care of all the trade finances that we have in Europe, in the European market, and in particular also looking to the new projects that we are into the cooperation.
Thank you. Nice to meet you. So maybe a few words on my side. Adriana Dammek. I'm deputy head in the structured and mezzanine finance department at MBANK. And MBANK is a deuter company of Commerce Bank. And yeah, we are home bank, so we operate in Poland and our core business is based in Poland. But in bigger projects we cooperate with Commerce Bank and as to renewable energy projects we cooperate with Center of Competence of Renewable Energy in Hamburg in Commerce Bank. So maybe such a short introduction and we are also, of course, covering all the structured deals, including project finance in renewable energy in Poland.
Okay, great. Yeah, so I can give a quick overview of Eurus Energy Europe and after that introduce the projects that we are looking to finance. So let me share my presentation. Okay, so can everyone see the slide? Yeah. Okay. Yes, so Eurus Energy is a Japanese company and actually we are the largest renewable energy company in Japan. Globally, we have a total installed capacity of more than 5 gigawatts and yeah, we are active in like 16 countries and regions. We started in 1987, which was actually in the United States. And yeah, now we are, we have like 40 locations and more than 800 employees active with us.
So our ultimate shareholder is Toyota Tsusho, like the trading part of Toyota. And then the Eurus Energy holding is headquartered in Tokyo. And yeah, we are one of the subsidiaries next to other regional initiatives. So yeah, we work with the local partnership. So we often cooperate with local developers. Yeah, so that we can use their local knowledge. Of course, ourselves, we have a good amount of knowledge and expertise because, yeah, we've been active for a couple of decades already and we invest for a long-term approach, so to basically stay involved in the projects for the full operational period.
Yeah, so this is an overview of our global portfolio. So more than 2 gigawatts in Japan, but also a good portfolio in Europe. We are also active in the Americas and other Asian and Pacific countries. So in Europe, currently we have most projects in Spain, the Netherlands and Italy, but we do actually have quite a pipeline in Poland. And yeah, I'll show our Polish projects in a bit. But yeah, first of all, any questions so far? No? Okay, so for Poland, we have our Zois and Zephyrus projects. I'll first give an introduction, then a more detailed overview of the projects, some highlights of the financing structure and envisage the timeline.
And yeah, if you have any questions, please let me know. Okay. So we want to arrange financing for two hybrid projects, including PV and onshore wind. The revenues will be based on the PPA, which will be either Polish zloty or euro. And yeah, and a smaller volume of merchant revenues. The projects are currently fully owned by Eurus Energy Europe, but yeah, we might divest 50% after financial close before or at COD. So these are the projects. So first of all, within the solar PV entities, we also aim to have a BESS capacity included, but this, yeah, because this will be merchant, we don't expect to include this in the debt sizing calculations.
So for the financing, we would be purely looking at the solar PV and the onshore wind. So the Zois 1 project is already under construction, but then the Zephyrus 1 onshore wind project is expected to start construction second half next year. And then we have the Zois 2 PV project that's currently in the contracting stage, and the Zephyrus 2 onshore wind project also expected to start construction second half next year. So yeah, we are currently expecting to have two facility agreements, one for Zois and Zephyrus 1, so including PV and onshore wind, and then another financing for Zois and Zephyrus 2.
So this financing will be in place after COD of the PV projects, but before construction of the onshore projects. So yeah, let's say mid-2027, and as indicated, there will also be best capacity included, but not for the debt sizing calculations. So the timeline we currently have in mind is to request term sheets probably after summer, then engage advisors and create a financial model in the fourth quarter this year, and start negotiating the final documentation early 2027, and then to finalize and hopefully sign the facility agreement second quarter 2027, and reach financial close shortly after. So yeah, this is the overview we wanted to share.
Do you have any questions? Yeah, so I do understand that you divided this project into two. Zeus 1 and Zephyrus 1 is the first one, and the second one is Zephyrus 2 and Zeus 2, yeah? And the idea is that there will be two separate facility agreements, and both of the projects consist of PV part and wind part, and the idea is that the financing starts on COD of PV project and the beginning of the construction period of wind farm, yeah? So we will have such a situation that the PV will have the production and during the wind will be constructed, yes?
And the idea also is to have most of the revenues secured under the PPA agreement. Am I correct? Yeah, yeah, yeah, exactly. Okay, so and the PPA agreement will be in Polish zloty or in euro, or in euro. So I'm guessing that most probably it should be known the value of this agreement before we provide the finance, because if you will get most of the revenues in euro, based on PPA revenue stream, the financing should be also in euro, yeah? Yes, exactly. You know, it seems like it will be difficult actually to arrange the PPA in euro.
So such a... It's important, but it's rare, yeah? Yeah, yeah. But yeah, we can explain a bit more about the PPA in a bit. Yeah. But yeah, I think, as you indicated, that's correct. Okay. And I do understand also that this energy storage part, you will not, because it's based on merchant risk, you will not include these revenues in debt sizing, yeah? Yes, exactly. This is the idea. Yeah. So it's something perfect for us, as a company. Okay, perfect. Good to hear. Especially such a combination PV plus wind, because you know that within the next, most probably two years, PV project will somehow suffer as long as we don't know, it depends on how quickly energy storage market will develop, yeah?
Yeah, yeah. It may somehow help, but this combination PV plus wind and if we have also storage, it's the best solution we can imagine. Yeah. Yeah, so Kasia, maybe you can give a bit more detail about our PPA strategy. That's the idea to have the separate financing agreement, facility agreement for Zeus 1 and Zephyrus 1 and another for Zeus 2 and Zephyrus 2, and at the same, probably we will have at least two concrete PPAs signed for both PV and wind. And the idea is to sign a PPA in virtual monthly basis. That's the question for you, if you will accept that virtual monthly basis.
Yeah, that's not a problem. So that's the idea. We plan, of course, to schedule at least 60% of the volume when we get the monthly basis, we will be able to secure at least 65-70% of the volume. Do you have any requirements regarding the minimum volume that could be secured under long-term PPA? We have a ten-month policy and strategy, and we are looking for 50% of secured revenues. And what about the minimum PPA timing? Do you have any minimum tenor you will accept? No, the market is changing. At the beginning, we saw only 5 up to 7 years PPAs, and this is the minimum we are looking for.
But of course, it may have impact on the final structure. If you provide with 10-year PPA, it's better than 5, yeah? But currently on the market, we see 10 and 15 years PPAs. So currently, it's not a problem, of course. It's a question on the price. What is the price between 5, 7, 10 and 15? You'll give the answer, yeah? Yeah, I knew the answer, but currently I don't see any signed PPA. There was only one announced PPA signed between McDonald's and Tauron. It was a short-term PPA, it was for 5 years, I think. When we discussed with potential off-takers, they would express that they are interested in short terms.
But yeah, still 5-7 years. Yeah, but not all of the PPAs are announced, yes? And so end of last year, the PPA in Europe for 15 years, yeah? So it's doable, but it's always the question about the price and other things, yes? And do you have any minimum credit quality expectation value in the paper? Only investment grade? I would answer this way. Investment grade is helpful, but we do not have such a requirement, yes? But in case you will decide to have one of the papers, we will have to analyze the creditworthiness, yes? So see the financial data, yeah?
That's for sure. Do you accept also utility PPA with trading company, not a corporate? We prefer corporate, yes, because there is a balance sheet behind it. We have in Poland such a history that traders were trying to cancel the off-takes, so it was a problem. So having such off-takers, but all depends on many things, yes? So we prefer corporate. That's also our preference. I remember those times I was also a member of one of Polish financing institutions suffered by the termination of the contract. Yes. So you know the best how it works, yeah? So if you decide to base your risk on one trader, it may affect the sizing, yes?
Because off-taker with trader with no strong balance sheet. We prefer corporate. We prepare corporate, yes, because there is a balance sheet behind it. Trader, you know, we have in Poland such a history that traders were trying to cancel the off-takes, so it was a problem. So having such off-takers, but all depends on many things, yes? So we prefer corporate. Yeah, that's also our preference. I remember those times I was also a member of one of Polish financing institutions suffered by the termination of the contract. Yeah, so you know the best how it works, yeah? So if you decide to base your risk on one trader, it may affect the sizing, yes?
Because off-taker with trader with no strong balance sheet. No, for sure we will not base the entire revenue stream on one off-taker. If there will be a company, there will be only for one part of the deal. So we will for sure not for full package. Okay. The condition that we should have a PPA or at least the currency at the date of structuring the financing, but can PPA be a CP? Can be, yes, can be, but then we can agree on the option that we will provide you with Polish Zloty or equivalent in euro if you secure the revenues in euro.
And for example, if you secure in euro 50% of revenues and the rest will be in Polish, we can provide you with, you know, to match and to reduce the FX risk part of the financing in Polish Zloty and part of it in euro, yeah? Any more questions about the PPA? Do you have any questions regarding the power strategy? I think that I know that after the summer you were looking for a term sheet, so I think it's maybe a good moment to start with NDA and sharing with materials, yes? Maybe not today, but when you will be ready with some more information, it requires really for preparing such a term sheet, we can start working because currently we are generally discussing, but you know, SBM is present on this market since 2011 or sorry, 2010, so we have a very long and huge experience in this market and strong support from our center of competence in Hamburg, from our mother company.
So at the beginning, we do not need so many information because, you know, the size of the project and what is the strategy as per securing of revenues, of course, the details later are much more important and we need to look into the figures, what you have some in the model. We are agreeing on the advisors and that's it. Yeah, okay. Yeah, maybe Amelia, did you want to ask some questions about the developments? Yeah, I have some questions coming from development side because as you can see, the timeline and the wind projects are still in development.
So basically the current status is that we are expecting the environmental decision for the project soon and the design process is already started. But of course, it's still a development. So we were wondering what status of the development would you be expected at financial close in terms of the building permits. So would you require us to have all permits in place at that time or some of them could be the conditions? In order to finance any project, we need all permits in place, yes. So it should be ready to build. So yeah, in order to disperse money for this exact project, yes.
So I don't understand that the projects are divided into two and the PV project and wind project. For example, Zeus 1 and Zeus Zephyrus 1, this is the one project and this project will be developed within the one SPV or not? No, that's two separate SPVs. Two separate SPVs. So I can imagine that there will be one facility agreement provided to two SPVs, each SPV will be borrower of exact amount of facility and each project will have their timeline, yes. So if you finalize PV projects, we will finance these PV projects and when wind projects will be ready, we will start financing these projects.
And it will be difficult to start financing wind projects before you get all permits. What about the permit for like medium voltage cable? I'm not sure if I correctly understood, but… So I understand that you will definitely be building permits for the wind timeline. But how about the cable, which usually comes at the end of the development? Generally, we are looking for all the permits at the stage of construction of the permits that are possible to obtain, yes. I mean that I know that some of the permits or concessions comes later, yes. So because honestly speaking, I'm not sure how I should answer on your question now, because maybe it's something specific, but if not, it has to be anyway confirmed.
But our advice, yes, what is the risk that you will not obtain this permit, yeah? I see. Okay, I think that that is clear. And the other question is related to the documentary board. So for the two of the first projects, we performed the LIDAR measurement campaign, which is in total around two years. And next to that, we also have the wind map data, but the data is a bit old and is coming from the lower mass, around 80 meters. Of course, the production report checked and is regarded valid currently for now, but we were wondering if there is any requirement coming from Enbank in respect of the LIDAR measurement campaign and the report itself.
It's not a problem to have LIDAR. And I know that these are specific questions and we rely on technical advisor opinion on that, yes. If there is something that is not typical. Yes, and as I know, DNV having different reports from lower mass and other things, they usually, I would say, extrapolate this in the final result. So it shouldn't be a problem. And as Enbank, we do not have specific requirements here. We rely on advisor advice. Okay, that is clear. And the lesson from my side, because we are approaching the design phase, which means that we are also in the process of selection of the turbine manufacturer for that project.
Of course, we are talking to the reputable European suppliers, but we were also wondering if Enbank would be accepting the Chinese suppliers for the project. We didn't have Chinese suppliers so far, I mean in turbine. All of them were European ones. So I will not answer you this question, but as to the turbine suppliers, Chinese turbine suppliers, that's a surprise for me, honestly speaking. Yeah, because, you know, from our perspective, the most important, but of course it has to be checked, but the most important thing is the track record of this turbine and supplier, yeah.
So our requirement as a basic is that such a turbine should have at least two years experience on the market, so it should be somewhere erected and under construction and proven that it is a good turbine. And as to suppliers, so we're based on the Europeans one, but I will not answer you directly if we check, but I don't know if it's accepted. As to PV, it's not a problem because there are all Chinese suppliers, but turbines, we don't have such a project in our portfolio. Yeah, maybe that's the... Go ahead, Matthias. So I mean that if you accept Chinese for PVs, I guess that could be more a technical issue rather than a reputational issue, right?
Yeah, yes, exactly, but the reputation is also very important, yes. But generally, if you decide to work with some Chinese supplier, we can check them with our German colleagues, yes. But we do not have experience with Chinese turbine suppliers. Yeah, actually, the Chinese supplier we are considering is the one that took over the German manufacturer, so it's called the innovative turbine. But we understand the approach. So yes, Matthias, I'm interested in understanding that this is a technical issue for you that should be confirmed again probably by the supplier. It should be, yes, provided and we have to check this company.
You know, there is on Bloomberg Tier 1 list of the best suppliers in, I think, each one, most probably also in turbines. So if this company will be in Tier 1, it shouldn't be a problem, although we will ask you a lot of questions about the spare parts, O&M agreement, and so on, because Vestas is present in Poland and other companies, GE and so on. But I'm not sure how many Chinese wind turbines were erected recently in Poland, especially that the Polish wind market was dead because of the regulations, yes. So not many, unfortunately. Not many, yes, but there are some, yes?
So there are some banted turbines installed in Poland. Okay, okay, okay. Yeah, because if the supplier is a new one on the market, there will be much more questions, technical and reputational, of course, and spare parts, yeah, and O&M. Yeah, but your position is clear and maybe to give you a bit more background on this one, so the projects are becoming challenging, especially in terms of securing the decent GPA levels for them. So that's why we are searching for alternatives, let's say, on the open market site in order to make the projects profitable also for the financing bank, obviously.
So that's the reason we are investigating this option at the early stage, so we officially have not decided. Probably our number one candidate would be the European supplier, but we would like to choose one by one. Okay, so everything has to be checked, yeah? Yeah. Okay, thank you. I don't have any other questions in terms of the development project. Maybe some final project finance-related questions that are coming from my colleagues. Yeah, so of course... Well, as you already indicated, you will also require reviews by advisors. So we were wondering which companies you would recommend for technical and legal advisors, and also for financial modeling.
And, well, you can also just send us an overview later by email, but it would be helpful to... Well, you know, we cooperate with the SAW. For example, there is not so many companies active on the Polish market, and as to legal, I think it's European standards, so it's Clifford Chance, Baker McKenzie, Allen & Overy. So I can send you the list, but it's not a complete list, because, you know, if you will decide to cooperate with some advisor, we can verify them. Yes, because it's not also the problem. Okay, okay, clear. I can provide you with this, so legal, technical advisors, yes?
Yeah, perfect. And would you also know any advisors who could assist with the financial modeling? Okay. That might also be good to know. Usually it was a big problem, yeah, but if you decide to cooperate with somebody else, it shouldn't be also a problem, because this model is not so complicated for us. Yeah, okay, clear. Of course, if you have some legally complicated structure, sometimes we are looking for a structure manual, but if there are simple two SPVs, Polish company, the structure manual is not required, generally. Yeah, okay, clear. Anybody else have any more questions?
No? No. Yeah, go ahead. So, okay, so maybe a question from my side. What is your plan for next steps? How do you want to proceed further? Because, of course, we are initially interested in cooperation with you, and yeah, so we should start with NTA, or...? Yeah, I think it's good to have a deal. Okay, will you send us your standard, or you are looking at this? You will send, okay, so send to me directly if we proceed, we can work further. And then after that, I think we would like to have some clear visibility of the PTA side and also make it secure, the environment for both projects.
But then we are target sending RFQ after summer. Great. Yeah. Okay. And then we just have one other item we wanted to discuss. Yeah, so we also have a 150 megawatt project, which will be probably... Already we are planning construction soon, and the operation will be at the end of next year. And we will have some kind of a tolling or floor agreement with that project by that time. And looking for project finance starting from COD. Would you be interested in such a project? Okay. So, have you agreed everything with BOSH or not yet? And BOSH?
And BOSH? Yes? Because I understand that you received the grant from BOSH, yes? Yes, yes. So, and the revenues are secured by a tolling agreement only, or you are having also capacity market? You don't have... We used that arrangement with the tolling agreement from now, that's why we don't like specific tolling afloat. Okay. Everything depends on the tolling agreement, yes? Ah, I see, I see. But is that minimum request? Generally, because, you know, this... We are working and looking for this kind of projects, but because the uncertainty of the prices on the market, we don't want to be significantly exposed on the market risk.
So, tolling agreement and capacity market should fully finance the debt, yeah? This is the idea, and... And FOSCH grant... Yeah, how to say that? Could be some challenge, because I don't know at what stage you are in discussion with them fully, but they won't have the first ranking security on the finance assets. So, there should be some intercreditor agreement, and it is less... It takes time to do them. And as I know, they are not offered for negotiating finance docs under English law, so only Polish one. There is a challenge with other languages than Polish one, but... You know that?
Well, yeah, we need to communicate. Yeah, so you should look at this, and... There is a lot of work with FOSCH to agree how they want to secure the grant, because they want to have security of the grant in the construction plus five years, yes? Yes, and they want to be first ranked secured on the assets, the same as banks. I see all that complicated. Yes, so, and discussions with Nforge are long-lasting, I would say. I mean that, of course, the investor can agree with them something, but it lasts, yeah? So, if you want to, I'm not sure when you want to have, you have to start construction of this project and how, yes, but if you want from the beginning have completed structure, I mean, have bank financing, Nforge and your equity, and everything should be agreed on this same time, you should start discussion with Nforge and banks immediately, because... We did the final thing in more than one year, so yeah, we start the construction of the batch.
Yeah, we just need, we also need to first arrange with the terms of building company, we both, what's the... Yes, okay, that's clear, but keep in, but bear in mind that, yeah, that Nforge wants to be secured on the assets as banks with first ranking pledges, so, yeah. Yeah, that complicates things, I see that. Yes, it could complicate things, yes, but these are money, these are money, free money take, yes, but the most important is to find solution with Nforge and banks how to secure and the financial structure of this financing, yes. As I know that Nforge has no one strategy and I see different solutions with different sponsors, so, yeah.
Do you have any example or track record of the financing projects with this grant? We hope to finalise such a project within the next two, three weeks, and let's see. I would say, but the first credit decision we had in October 2025, yes. And the client received this Nforge grant and started discussions with Nforge and banks, and yeah. Now I see why you are so concerned about it. Yes, it takes a lot of time to agree with Nforge, a lot of time. Of course, they are in discussions with other investors, so they are having some solutions now.
And maybe in the next month it will be easier then to agree on something, yes, but still I think that I would recommend you to start discussions with them. Good points, thank you. Yeah. Of course, we like agreement is the most important, but still. Of course, if you have equity and you can start with equity and Nforge grant, then you have to have the structure again, yes, with banks, refinancing and so on. So you should be ready if you get this grant for the situation that Nforge said, sorry, I have to be secured, and then how you secure the banks, yes.
So it should, you should have it prepared before, yes, in my opinion, not to be surprised then. Because the security required by Nforge is for the construction period plus five years. Yes, because this period they will check you if you, you know, if the project is in line with these parameters you promised to have, yes, in this project. So this period is called, I know Kataryna in Poland, okres utwary. Całości. Yes, całości. It's, I am not sure how it's in English. Yeah, I know. Yeah, so this is about that. So then they want to be secured over this, also this five years.
Five years. Of course, we are open to look also at this project, of course, but yeah, to leak agreement and Nforge should be somehow taken. Okay. All right, thank you. Okay, so... Okay. Thank you very much. So then, yeah, I think we'll share our template NDA. Okay. And then, yeah, if you could indicate your recommended advisors. Okay. And then once our projects are further addressed, you can, you'll get back in touch with you. Right. Great plan for summer. Very hot in Poland. So you are in Poland, yes? So you know that is Carol Kataryna is not in Poland today?
No, I think, now I'm based in Amsterdam. I want to Amsterdam myself. Ah, okay, okay. So in Poland we have nightmare. Slightly lower today, but it's hard to, it's better to stay at work with air condition. Not to go home. At the same time it was 39 degrees in Amsterdam on Friday. Nightmare, honestly speaking, nightmare. But it's good for PV maybe projects, not for the, but the prices are going down, down because, you know. Okay. Okay, so I'm waiting for NDA and hopefully we manage to do something together. Yes, then we will take NDA. Yeah, exactly.
Okay. So thank you, sorry. Yeah, yeah, yeah. Yes, thank you. All right, thank you. Thank you. All right, you too. Okay, goodbye.
- Discussion on the introduction of participants from various companies involved in renewable energy projects.
- Overview of Eurus Energy Europe, highlighting its capacity of more than 5 gigawatts and presence in 16 countries, including Poland.
- Introduction of two projects in Poland: Zois and Zephyrus, incorporating PV and onshore wind components.
- Financing structure will be based on agreements in either Polish zloty or euros, with different stages of construction and operational readiness discussed.
- PPA strategy outlined, expressing preference for corporate off-takers and securing volumes for financing needs.
- Technical specifications and requirements for turbines discussed, with a focus on supplier reliability and history.
- Plans to share NDA and begin working on further project details and financing structure.
Content:
Hello, how are you doing? Good. Good. Yeah, a bit strange because today is my daughter's last day at elementary school. Oh my God, what a milestone. Thank you, yeah. Yeah. So, special day. Yeah. Hello, good morning. Can you hear us? Yep, you can. Can you hear us? I'm fine. Can you hear us? Yes. Okay. Shall we wait for Katayama-san to join? Yeah, this previous meeting is taking a bit long. Yeah. I'll ask him if we should wait. Okay, thanks. Based on my invite, yeah. Okay. Hello, good afternoon. Hello, good afternoon. Hi. Hello. Thank you for the meeting.
We appreciate the opportunity to introduce the company, our project, and discuss about potential cooperation. We will start from short introductions. On our side, we still wait for our project to join us in a few seconds. Okay, so maybe we should wait, yes? Okay, we can start. Okay, we should wait for a few seconds. Maybe I will start here, ready? Sure, yeah. My name is Katayama, I'm the sales manager, and I joined the company in September last year. Hi, my name is Toshi, I'm the business development team here at Tiers. I mainly focus on business development in Bulgaria, but I'm also supporting the quality team as well.
I'm based in Amsterdam, nice to meet you. Nice to meet you. Yes, hi, my name is Emilia Moszka. I'm based in Poland and my scope is the development of all onshore and PV projects. I'm bringing to the projects actual design. So, yeah, nice to meet you. Nice to meet you. Okay, Matheus. Hello, good morning. My name is Matheus. I live in Spain. I'm looking into the payments in charge of taking care of all the trade finances that we have in Europe, in the European market, and in particular also looking to the new projects that we are into the cooperation.
Thank you. Nice to meet you. So maybe a few words on my side. Adriana Dammek. I'm deputy head in the structured and mezzanine finance department at MBANK. And MBANK is a deuter company of Commerce Bank. And yeah, we are home bank, so we operate in Poland and our core business is based in Poland. But in bigger projects we cooperate with Commerce Bank and as to renewable energy projects we cooperate with Center of Competence of Renewable Energy in Hamburg in Commerce Bank. So maybe such a short introduction and we are also, of course, covering all the structured deals, including project finance in renewable energy in Poland.
Okay, great. Yeah, so I can give a quick overview of Eurus Energy Europe and after that introduce the projects that we are looking to finance. So let me share my presentation. Okay, so can everyone see the slide? Yeah. Okay. Yes, so Eurus Energy is a Japanese company and actually we are the largest renewable energy company in Japan. Globally, we have a total installed capacity of more than 5 gigawatts and yeah, we are active in like 16 countries and regions. We started in 1987, which was actually in the United States. And yeah, now we are, we have like 40 locations and more than 800 employees active with us.
So our ultimate shareholder is Toyota Tsusho, like the trading part of Toyota. And then the Eurus Energy holding is headquartered in Tokyo. And yeah, we are one of the subsidiaries next to other regional initiatives. So yeah, we work with the local partnership. So we often cooperate with local developers. Yeah, so that we can use their local knowledge. Of course, ourselves, we have a good amount of knowledge and expertise because, yeah, we've been active for a couple of decades already and we invest for a long-term approach, so to basically stay involved in the projects for the full operational period.
Yeah, so this is an overview of our global portfolio. So more than 2 gigawatts in Japan, but also a good portfolio in Europe. We are also active in the Americas and other Asian and Pacific countries. So in Europe, currently we have most projects in Spain, the Netherlands and Italy, but we do actually have quite a pipeline in Poland. And yeah, I'll show our Polish projects in a bit. But yeah, first of all, any questions so far? No? Okay, so for Poland, we have our Zois and Zephyrus projects. I'll first give an introduction, then a more detailed overview of the projects, some highlights of the financing structure and envisage the timeline.
And yeah, if you have any questions, please let me know. Okay. So we want to arrange financing for two hybrid projects, including PV and onshore wind. The revenues will be based on the PPA, which will be either Polish zloty or euro. And yeah, and a smaller volume of merchant revenues. The projects are currently fully owned by Eurus Energy Europe, but yeah, we might divest 50% after financial close before or at COD. So these are the projects. So first of all, within the solar PV entities, we also aim to have a BESS capacity included, but this, yeah, because this will be merchant, we don't expect to include this in the debt sizing calculations.
So for the financing, we would be purely looking at the solar PV and the onshore wind. So the Zois 1 project is already under construction, but then the Zephyrus 1 onshore wind project is expected to start construction second half next year. And then we have the Zois 2 PV project that's currently in the contracting stage, and the Zephyrus 2 onshore wind project also expected to start construction second half next year. So yeah, we are currently expecting to have two facility agreements, one for Zois and Zephyrus 1, so including PV and onshore wind, and then another financing for Zois and Zephyrus 2.
So this financing will be in place after COD of the PV projects, but before construction of the onshore projects. So yeah, let's say mid-2027, and as indicated, there will also be best capacity included, but not for the debt sizing calculations. So the timeline we currently have in mind is to request term sheets probably after summer, then engage advisors and create a financial model in the fourth quarter this year, and start negotiating the final documentation early 2027, and then to finalize and hopefully sign the facility agreement second quarter 2027, and reach financial close shortly after. So yeah, this is the overview we wanted to share.
Do you have any questions? Yeah, so I do understand that you divided this project into two. Zeus 1 and Zephyrus 1 is the first one, and the second one is Zephyrus 2 and Zeus 2, yeah? And the idea is that there will be two separate facility agreements, and both of the projects consist of PV part and wind part, and the idea is that the financing starts on COD of PV project and the beginning of the construction period of wind farm, yeah? So we will have such a situation that the PV will have the production and during the wind will be constructed, yes?
And the idea also is to have most of the revenues secured under the PPA agreement. Am I correct? Yeah, yeah, yeah, exactly. Okay, so and the PPA agreement will be in Polish zloty or in euro, or in euro. So I'm guessing that most probably it should be known the value of this agreement before we provide the finance, because if you will get most of the revenues in euro, based on PPA revenue stream, the financing should be also in euro, yeah? Yes, exactly. You know, it seems like it will be difficult actually to arrange the PPA in euro.
So such a... It's important, but it's rare, yeah? Yeah, yeah. But yeah, we can explain a bit more about the PPA in a bit. Yeah. But yeah, I think, as you indicated, that's correct. Okay. And I do understand also that this energy storage part, you will not, because it's based on merchant risk, you will not include these revenues in debt sizing, yeah? Yes, exactly. This is the idea. Yeah. So it's something perfect for us, as a company. Okay, perfect. Good to hear. Especially such a combination PV plus wind, because you know that within the next, most probably two years, PV project will somehow suffer as long as we don't know, it depends on how quickly energy storage market will develop, yeah?
Yeah, yeah. It may somehow help, but this combination PV plus wind and if we have also storage, it's the best solution we can imagine. Yeah. Yeah, so Kasia, maybe you can give a bit more detail about our PPA strategy. That's the idea to have the separate financing agreement, facility agreement for Zeus 1 and Zephyrus 1 and another for Zeus 2 and Zephyrus 2, and at the same, probably we will have at least two concrete PPAs signed for both PV and wind. And the idea is to sign a PPA in virtual monthly basis. That's the question for you, if you will accept that virtual monthly basis.
Yeah, that's not a problem. So that's the idea. We plan, of course, to schedule at least 60% of the volume when we get the monthly basis, we will be able to secure at least 65-70% of the volume. Do you have any requirements regarding the minimum volume that could be secured under long-term PPA? We have a ten-month policy and strategy, and we are looking for 50% of secured revenues. And what about the minimum PPA timing? Do you have any minimum tenor you will accept? No, the market is changing. At the beginning, we saw only 5 up to 7 years PPAs, and this is the minimum we are looking for.
But of course, it may have impact on the final structure. If you provide with 10-year PPA, it's better than 5, yeah? But currently on the market, we see 10 and 15 years PPAs. So currently, it's not a problem, of course. It's a question on the price. What is the price between 5, 7, 10 and 15? You'll give the answer, yeah? Yeah, I knew the answer, but currently I don't see any signed PPA. There was only one announced PPA signed between McDonald's and Tauron. It was a short-term PPA, it was for 5 years, I think. When we discussed with potential off-takers, they would express that they are interested in short terms.
But yeah, still 5-7 years. Yeah, but not all of the PPAs are announced, yes? And so end of last year, the PPA in Europe for 15 years, yeah? So it's doable, but it's always the question about the price and other things, yes? And do you have any minimum credit quality expectation value in the paper? Only investment grade? I would answer this way. Investment grade is helpful, but we do not have such a requirement, yes? But in case you will decide to have one of the papers, we will have to analyze the creditworthiness, yes? So see the financial data, yeah?
That's for sure. Do you accept also utility PPA with trading company, not a corporate? We prefer corporate, yes, because there is a balance sheet behind it. We have in Poland such a history that traders were trying to cancel the off-takes, so it was a problem. So having such off-takers, but all depends on many things, yes? So we prefer corporate. That's also our preference. I remember those times I was also a member of one of Polish financing institutions suffered by the termination of the contract. Yes. So you know the best how it works, yeah? So if you decide to base your risk on one trader, it may affect the sizing, yes?
Because off-taker with trader with no strong balance sheet. We prefer corporate. We prepare corporate, yes, because there is a balance sheet behind it. Trader, you know, we have in Poland such a history that traders were trying to cancel the off-takes, so it was a problem. So having such off-takers, but all depends on many things, yes? So we prefer corporate. Yeah, that's also our preference. I remember those times I was also a member of one of Polish financing institutions suffered by the termination of the contract. Yeah, so you know the best how it works, yeah? So if you decide to base your risk on one trader, it may affect the sizing, yes?
Because off-taker with trader with no strong balance sheet. No, for sure we will not base the entire revenue stream on one off-taker. If there will be a company, there will be only for one part of the deal. So we will for sure not for full package. Okay. The condition that we should have a PPA or at least the currency at the date of structuring the financing, but can PPA be a CP? Can be, yes, can be, but then we can agree on the option that we will provide you with Polish Zloty or equivalent in euro if you secure the revenues in euro.
And for example, if you secure in euro 50% of revenues and the rest will be in Polish, we can provide you with, you know, to match and to reduce the FX risk part of the financing in Polish Zloty and part of it in euro, yeah? Any more questions about the PPA? Do you have any questions regarding the power strategy? I think that I know that after the summer you were looking for a term sheet, so I think it's maybe a good moment to start with NDA and sharing with materials, yes? Maybe not today, but when you will be ready with some more information, it requires really for preparing such a term sheet, we can start working because currently we are generally discussing, but you know, SBM is present on this market since 2011 or sorry, 2010, so we have a very long and huge experience in this market and strong support from our center of competence in Hamburg, from our mother company.
So at the beginning, we do not need so many information because, you know, the size of the project and what is the strategy as per securing of revenues, of course, the details later are much more important and we need to look into the figures, what you have some in the model. We are agreeing on the advisors and that's it. Yeah, okay. Yeah, maybe Amelia, did you want to ask some questions about the developments? Yeah, I have some questions coming from development side because as you can see, the timeline and the wind projects are still in development.
So basically the current status is that we are expecting the environmental decision for the project soon and the design process is already started. But of course, it's still a development. So we were wondering what status of the development would you be expected at financial close in terms of the building permits. So would you require us to have all permits in place at that time or some of them could be the conditions? In order to finance any project, we need all permits in place, yes. So it should be ready to build. So yeah, in order to disperse money for this exact project, yes.
So I don't understand that the projects are divided into two and the PV project and wind project. For example, Zeus 1 and Zeus Zephyrus 1, this is the one project and this project will be developed within the one SPV or not? No, that's two separate SPVs. Two separate SPVs. So I can imagine that there will be one facility agreement provided to two SPVs, each SPV will be borrower of exact amount of facility and each project will have their timeline, yes. So if you finalize PV projects, we will finance these PV projects and when wind projects will be ready, we will start financing these projects.
And it will be difficult to start financing wind projects before you get all permits. What about the permit for like medium voltage cable? I'm not sure if I correctly understood, but… So I understand that you will definitely be building permits for the wind timeline. But how about the cable, which usually comes at the end of the development? Generally, we are looking for all the permits at the stage of construction of the permits that are possible to obtain, yes. I mean that I know that some of the permits or concessions comes later, yes. So because honestly speaking, I'm not sure how I should answer on your question now, because maybe it's something specific, but if not, it has to be anyway confirmed.
But our advice, yes, what is the risk that you will not obtain this permit, yeah? I see. Okay, I think that that is clear. And the other question is related to the documentary board. So for the two of the first projects, we performed the LIDAR measurement campaign, which is in total around two years. And next to that, we also have the wind map data, but the data is a bit old and is coming from the lower mass, around 80 meters. Of course, the production report checked and is regarded valid currently for now, but we were wondering if there is any requirement coming from Enbank in respect of the LIDAR measurement campaign and the report itself.
It's not a problem to have LIDAR. And I know that these are specific questions and we rely on technical advisor opinion on that, yes. If there is something that is not typical. Yes, and as I know, DNV having different reports from lower mass and other things, they usually, I would say, extrapolate this in the final result. So it shouldn't be a problem. And as Enbank, we do not have specific requirements here. We rely on advisor advice. Okay, that is clear. And the lesson from my side, because we are approaching the design phase, which means that we are also in the process of selection of the turbine manufacturer for that project.
Of course, we are talking to the reputable European suppliers, but we were also wondering if Enbank would be accepting the Chinese suppliers for the project. We didn't have Chinese suppliers so far, I mean in turbine. All of them were European ones. So I will not answer you this question, but as to the turbine suppliers, Chinese turbine suppliers, that's a surprise for me, honestly speaking. Yeah, because, you know, from our perspective, the most important, but of course it has to be checked, but the most important thing is the track record of this turbine and supplier, yeah.
So our requirement as a basic is that such a turbine should have at least two years experience on the market, so it should be somewhere erected and under construction and proven that it is a good turbine. And as to suppliers, so we're based on the Europeans one, but I will not answer you directly if we check, but I don't know if it's accepted. As to PV, it's not a problem because there are all Chinese suppliers, but turbines, we don't have such a project in our portfolio. Yeah, maybe that's the... Go ahead, Matthias. So I mean that if you accept Chinese for PVs, I guess that could be more a technical issue rather than a reputational issue, right?
Yeah, yes, exactly, but the reputation is also very important, yes. But generally, if you decide to work with some Chinese supplier, we can check them with our German colleagues, yes. But we do not have experience with Chinese turbine suppliers. Yeah, actually, the Chinese supplier we are considering is the one that took over the German manufacturer, so it's called the innovative turbine. But we understand the approach. So yes, Matthias, I'm interested in understanding that this is a technical issue for you that should be confirmed again probably by the supplier. It should be, yes, provided and we have to check this company.
You know, there is on Bloomberg Tier 1 list of the best suppliers in, I think, each one, most probably also in turbines. So if this company will be in Tier 1, it shouldn't be a problem, although we will ask you a lot of questions about the spare parts, O&M agreement, and so on, because Vestas is present in Poland and other companies, GE and so on. But I'm not sure how many Chinese wind turbines were erected recently in Poland, especially that the Polish wind market was dead because of the regulations, yes. So not many, unfortunately. Not many, yes, but there are some, yes?
So there are some banted turbines installed in Poland. Okay, okay, okay. Yeah, because if the supplier is a new one on the market, there will be much more questions, technical and reputational, of course, and spare parts, yeah, and O&M. Yeah, but your position is clear and maybe to give you a bit more background on this one, so the projects are becoming challenging, especially in terms of securing the decent GPA levels for them. So that's why we are searching for alternatives, let's say, on the open market site in order to make the projects profitable also for the financing bank, obviously.
So that's the reason we are investigating this option at the early stage, so we officially have not decided. Probably our number one candidate would be the European supplier, but we would like to choose one by one. Okay, so everything has to be checked, yeah? Yeah. Okay, thank you. I don't have any other questions in terms of the development project. Maybe some final project finance-related questions that are coming from my colleagues. Yeah, so of course... Well, as you already indicated, you will also require reviews by advisors. So we were wondering which companies you would recommend for technical and legal advisors, and also for financial modeling.
And, well, you can also just send us an overview later by email, but it would be helpful to... Well, you know, we cooperate with the SAW. For example, there is not so many companies active on the Polish market, and as to legal, I think it's European standards, so it's Clifford Chance, Baker McKenzie, Allen & Overy. So I can send you the list, but it's not a complete list, because, you know, if you will decide to cooperate with some advisor, we can verify them. Yes, because it's not also the problem. Okay, okay, clear. I can provide you with this, so legal, technical advisors, yes?
Yeah, perfect. And would you also know any advisors who could assist with the financial modeling? Okay. That might also be good to know. Usually it was a big problem, yeah, but if you decide to cooperate with somebody else, it shouldn't be also a problem, because this model is not so complicated for us. Yeah, okay, clear. Of course, if you have some legally complicated structure, sometimes we are looking for a structure manual, but if there are simple two SPVs, Polish company, the structure manual is not required, generally. Yeah, okay, clear. Anybody else have any more questions?
No? No. Yeah, go ahead. So, okay, so maybe a question from my side. What is your plan for next steps? How do you want to proceed further? Because, of course, we are initially interested in cooperation with you, and yeah, so we should start with NTA, or...? Yeah, I think it's good to have a deal. Okay, will you send us your standard, or you are looking at this? You will send, okay, so send to me directly if we proceed, we can work further. And then after that, I think we would like to have some clear visibility of the PTA side and also make it secure, the environment for both projects.
But then we are target sending RFQ after summer. Great. Yeah. Okay. And then we just have one other item we wanted to discuss. Yeah, so we also have a 150 megawatt project, which will be probably... Already we are planning construction soon, and the operation will be at the end of next year. And we will have some kind of a tolling or floor agreement with that project by that time. And looking for project finance starting from COD. Would you be interested in such a project? Okay. So, have you agreed everything with BOSH or not yet? And BOSH?
And BOSH? Yes? Because I understand that you received the grant from BOSH, yes? Yes, yes. So, and the revenues are secured by a tolling agreement only, or you are having also capacity market? You don't have... We used that arrangement with the tolling agreement from now, that's why we don't like specific tolling afloat. Okay. Everything depends on the tolling agreement, yes? Ah, I see, I see. But is that minimum request? Generally, because, you know, this... We are working and looking for this kind of projects, but because the uncertainty of the prices on the market, we don't want to be significantly exposed on the market risk.
So, tolling agreement and capacity market should fully finance the debt, yeah? This is the idea, and... And FOSCH grant... Yeah, how to say that? Could be some challenge, because I don't know at what stage you are in discussion with them fully, but they won't have the first ranking security on the finance assets. So, there should be some intercreditor agreement, and it is less... It takes time to do them. And as I know, they are not offered for negotiating finance docs under English law, so only Polish one. There is a challenge with other languages than Polish one, but... You know that?
Well, yeah, we need to communicate. Yeah, so you should look at this, and... There is a lot of work with FOSCH to agree how they want to secure the grant, because they want to have security of the grant in the construction plus five years, yes? Yes, and they want to be first ranked secured on the assets, the same as banks. I see all that complicated. Yes, so, and discussions with Nforge are long-lasting, I would say. I mean that, of course, the investor can agree with them something, but it lasts, yeah? So, if you want to, I'm not sure when you want to have, you have to start construction of this project and how, yes, but if you want from the beginning have completed structure, I mean, have bank financing, Nforge and your equity, and everything should be agreed on this same time, you should start discussion with Nforge and banks immediately, because... We did the final thing in more than one year, so yeah, we start the construction of the batch.
Yeah, we just need, we also need to first arrange with the terms of building company, we both, what's the... Yes, okay, that's clear, but keep in, but bear in mind that, yeah, that Nforge wants to be secured on the assets as banks with first ranking pledges, so, yeah. Yeah, that complicates things, I see that. Yes, it could complicate things, yes, but these are money, these are money, free money take, yes, but the most important is to find solution with Nforge and banks how to secure and the financial structure of this financing, yes. As I know that Nforge has no one strategy and I see different solutions with different sponsors, so, yeah.
Do you have any example or track record of the financing projects with this grant? We hope to finalise such a project within the next two, three weeks, and let's see. I would say, but the first credit decision we had in October 2025, yes. And the client received this Nforge grant and started discussions with Nforge and banks, and yeah. Now I see why you are so concerned about it. Yes, it takes a lot of time to agree with Nforge, a lot of time. Of course, they are in discussions with other investors, so they are having some solutions now.
And maybe in the next month it will be easier then to agree on something, yes, but still I think that I would recommend you to start discussions with them. Good points, thank you. Yeah. Of course, we like agreement is the most important, but still. Of course, if you have equity and you can start with equity and Nforge grant, then you have to have the structure again, yes, with banks, refinancing and so on. So you should be ready if you get this grant for the situation that Nforge said, sorry, I have to be secured, and then how you secure the banks, yes.
So it should, you should have it prepared before, yes, in my opinion, not to be surprised then. Because the security required by Nforge is for the construction period plus five years. Yes, because this period they will check you if you, you know, if the project is in line with these parameters you promised to have, yes, in this project. So this period is called, I know Kataryna in Poland, okres utwary. Całości. Yes, całości. It's, I am not sure how it's in English. Yeah, I know. Yeah, so this is about that. So then they want to be secured over this, also this five years.
Five years. Of course, we are open to look also at this project, of course, but yeah, to leak agreement and Nforge should be somehow taken. Okay. All right, thank you. Okay, so... Okay. Thank you very much. So then, yeah, I think we'll share our template NDA. Okay. And then, yeah, if you could indicate your recommended advisors. Okay. And then once our projects are further addressed, you can, you'll get back in touch with you. Right. Great plan for summer. Very hot in Poland. So you are in Poland, yes? So you know that is Carol Kataryna is not in Poland today?
No, I think, now I'm based in Amsterdam. I want to Amsterdam myself. Ah, okay, okay. So in Poland we have nightmare. Slightly lower today, but it's hard to, it's better to stay at work with air condition. Not to go home. At the same time it was 39 degrees in Amsterdam on Friday. Nightmare, honestly speaking, nightmare. But it's good for PV maybe projects, not for the, but the prices are going down, down because, you know. Okay. Okay, so I'm waiting for NDA and hopefully we manage to do something together. Yes, then we will take NDA. Yeah, exactly.
Okay. So thank you, sorry. Yeah, yeah, yeah. Yes, thank you. All right, thank you. Thank you. All right, you too. Okay, goodbye.