VGD Corporate Finance was an exclusive financial advisor and a partner for procuring the project financing of CZK 76m for reconstruction of the combined cycle station of 0.8 MWe powered by the synthetic gas produced from biomass.

VGDCF, with its largest project finance team, provides their clients with comprehensive solutions ranging from project financing through on-balance funding to complex corporate restructuring.

Petr Beránek, the Transaction Manager, commented on: “Project financing in the power industry used to be relatively easy – reasonable amount of regulation created predictable environment in the long run. Nowadays, however, it is a challenging task with the number of risky details and pitfalls. I am glad we have managed to find a feasible solution with the client and the bank.”

The project of the combined cycle power plant with the nominal electrical output of 0.8 MWe and the thermal output of 1.172 MWt is situated in the industrial area next to the city of Teplice, Northern Bohemia. Combined cycle unit will be powered by the synthetic gas, produced in its own fuel refinery by way of gasification of the biomass – wood chips and the wood waste from the production in the industrial area. Power produced by the plant will be sold to the distribution network and the heat will be delivered to the clients in the industrial area. Charcoal, the by-product of the gasification, will be sold in the open market.

Senior bank project financing, granted by Poštová Banka to the tune of CZK 76m, will turn from the construction facility into a long term amortizing loan after the completion and the commercial launch.

Petr Horák of Team ENERGO, the investor, commented on: “When VGD Corporate Finance team helped us to arrange the financing of the project, we have had our capacity released for our core business – which includes searching, developing and implementing other projects.”

Team ENERGO is an investment group of power industry professionals headed by Petr Horák from Brno. The group focuses on Czech and Slovak market, where local opportunities in the industry are being searched. The target industry includes, among others, the municipal power industry, independent power networks and combined cycle units powered by synthetic gas. The group also acquires and revitalizes non-performing power projects.

The transaction was successfully concluded in April 2018.