Investors in dilemma about RES pilot tender

Prospective investors are in dilemma about the participation in a RES pilot tender for the installation of new PV systems announced by Regulatory Authority for Energy of Greece as they are required to provide additional letters of guarantee.

Potential investors are upset after they have been informed that they are required to provide follow-up letters of guarantee and to forward them to accept the procedure’s connection conditions. The RES pilot tender, offering producers a total capacity of at least 40 MW for the installation of new PV systems, is scheduled for December 12.

Although certain investors have admitted that a protective clause is needed in the event that companies fail to actualize their respective projects, they have also pointed out that the additional letter of guarantee demanded by RAE is unfair as it is the second one requested for the same investment. This is the reason why certain companies consider whether to provide additional second letters of guarantee or sacrifice those already submitted.

The initial letters of guarantee were submitted by interested investors a few days ago and several prospective bidders claim that they would not provide the first letter of guarantee if they knew that they would be required to provide an additional letter of guarantee. Their argumentation for such a reaction is that they need to deposit corresponding amounts into their bank accounts which can affect their financial plans and that obtaining letters of guarantee from Greek banks is no longer a simple process.

The tender is divided into two categories, one covering amounts of up to 1 MW while the other covers amounts of over 1 MW which is in accordance with the new law. The first category will concern small PV facilities with capacities between 500 KW and 1 MW and they will be able to bid for 20% that is 8 MW of the auction’s total amount. The other auction category will concern PV facilities with capacities of over 1 MW. The experts believe that investors’ interest in the small-scale category will be moderate as a result of the anticipated low returns on the investment.