Renewables

Aydem to use part of USD 750 million green bond issue for hybrid power plant projects

Aydem USD 750 million green bond hybrid power plant

Hydropower plant Mentaş (Aydem Renewables)

Published

August 4, 2021

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Published:

August 4, 2021

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Turkish company Aydem Renewables sold green bonds for USD 750 million to pay off bank loans and build green energy plants that would double its capacity by 2025 to more than 2 GW. It will mostly focus on adding solar power units to hydro and wind assets, upgrading them to hybrid power plants.

Aydem Renewables or Aydem Yenilenebilir Enerji, which started trading at the Borsa Istanbul in late April, wants to ease the effects of droughts on its hydropower plant output by expanding them with solar power plants. Following the major initial public offering, its next move was to raise funds via a green bond offering to pay off bank loans and invest in three such endeavors, but also to expand a wind power plant with photovoltaics.

The integration of two or more power plants of different technologies makes them hybrid power plants. It stabilizes production levels, especially in the renewable energy sector, as wind, solar and hydropower facilities depend on unpredictable weather conditions.

Cengiz Holding has just completed the first hybrid power plant in Turkey by adding a 80 MW solar unit to its Lower Kaleköy hydroelectric system of 510 MW in the country’s east.

Company doubled its hybrid investment plan to 600 MW

Aydem Renewables raised USD 750 million in the international market with its Eurobond issue with the idea to turn its loan burden into an opportunity for investors. A part of the proceeds will be used for the first phase of its 600 MW hybrid investment plan, recently boosted from 300 MW.

Aydem Holding’s renewable energy subsidiary plans to double its portfolio of just above 1 GW by 2025. It currently runs 25 units across Turkey. The company said it would expand only by installing new capacity.

The solar power plants that will be added to three hydropower units and a wind farm are planned to have a combined peak capacity of 236 MW.

Aydem Renewables has grace period of 3.5 years

The company initially aimed to raise USD 1 billion. The green bonds mature in 5.5 years, of which the first 3.5 years is the grace period, and the interest rate landed at 7.75%. Investors offered to buy USD 1.6 billion worth of debt, which means the package was oversubscribed by 2.1 times.

Küpeli: EBRD bought 10% of the green Eurobond package

Aydem Renewables noted it was the largest green debt sale in Turkey so far and the biggest such transaction ever in the green energy sector in the region of Central and Eastern Europe, Middle East and Africa (CEEMEA).

Aydem Energy’s Chief Executive Officer and Aydem Renewables’ Chairman İdris Küpeli revealed the European Bank for Reconstruction and Development took a 10% share and that 96% of the investors are long-term funds.

Three-year deadline for first four projects

The 99 MW Akıncı hydropower plant in Tokat, opened last year on Kelkit river, will be expanded with a 74.4 MW photovoltaic plant. The investment is estimated at EUR 22.3 million. Aydem said it earmarked EUR 17 million to add 56.4 MW in solar power to its 63 MW Koyulhisar hydropower plant on the Kelkit river in Sivas in central Turkey.

The third hydroelectric facility is Mentaş in Adana. Its four units have a combined capacity of 49.6 MW, which will be expanded with 55.6 MW of solar power. The company intends to spend EUR 14.8 million on the hybrid power plant project.

An auxiliary photovoltaic unit of 55.6 MW will be added to the 61.5 MW Uşak wind power plant in the western province of the same name. Aydem Renewables said it would finish all four solar power units within three years.

Managing drought impact

More than a quarter of electricity produced last year in Turkey came from hydropower plants, which face increasing issues due to droughts. CEO İdris Küpeli pointed to the negative impact on the energy market and rising prices. Investments in hybrid power plants result in diversification and reduce the effect of global warming, he said.

According to Küpeli, Aydem Renewables will complete a 240 MW solar power plant by the end of the year and the company’s installed capacity will reach 1.7 GW by the end of next year. Its IPO was the largest in Turkey in the previous three years.

Of note, Zorlu Enerji Elektrik or Zorlu Energy said earlier last year that it would build a 3.6 MW photovoltaic unit at its 45 MW Alaşehir geothermal facility in Manisa in Turkey’s west.

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