In April 2022, Australia and New Zealand Banking Group Ltd, alongside six other international and domestic banks, closed the NTD 9.4 billion (~USD 328 million) senior debt package for the refinancing and recapitalisation of Zhou Young Co., Ltd, a company wholly owned by the BlackRock Inc. managed fund, Global Renewable Power Fund II.
Zhou Young Co., Ltd owns and operates a portfolio of 42 diversified solar projects comprising ground-mounted, rooftop and floating solar assets. The portfolio has an aggregate capacity of 186MW that is capable of generating up to 270 million kWh of clean electricity each year or the equivalent of powering approximately 80,000 households.
The portfolio was developed from concept through construction to operations by BlackRock Real Assets and New Green Power, a company 70% owned by the BlackRock Inc. managed fund Global Renewable Power Fund III. The portfolio is an important element of BlackRock Real Assets’ climate infrastructure portfolio within the Asia-Pacific region.
The assets are geographically diversified along the west coast of Taiwan. Each asset is fully contracted under 20-year a Power Purchase Agreement with Taiwan Power Company (the state-owned utility) and operated by New Green Power.
Given the number, size and diversity of its solar assets, Zhou Young Co., Ltd sought to optimise the financing of its capital structure and take advantage of the aggregate cash flows of the portfolio rather than seek financing on an individual asset basis.
The financing was structured as a non-recourse senior debt facility at the holding company level. This allowed the company to raise a higher level of senior debt than would otherwise have been the case and permitted both the refinancing of all existing debt and the recapitalisation of the company through an upfront distribution to the equity investors.
The senior debt was structured to take advantage of the committed long-term contracted revenues under the Power Purchase Agreement with the repayment profile linked to the forecast semi-annual cash flows over the lives of the individual assets. The financing contained some Taiwan market leading features including a Debt Service Reserve Facility.
The financing was the first financing undertaken under the Loan Market Association Green Loan Principles (2021) for a renewables portfolio financing in Taiwan and sets a benchmark for future transactions of this nature. Compliance with the Green Loan Principles was undertaken by an external review by consultant DNV GL.
Australia and New Zealand Banking Group Ltd acted as a Mandated Lead Arranger for the financing.