denotes premium content | Jan 6 2009 
Feature
posted 23 Feb 2005 in Volume 8 Issue 4
Youngduk wind park, Korea: Showing foresight
MLA: BNP Paribas
Borrower: Youngduk Wind Power
Deal size: €48m ($61.7m)
ECA: EKF – 95% comprehensive guarantee during pre and post-completion on tranche one (€26.4m)
Tenor and payment schedules: export credit tenor is 11 years including one-year availability
Margin & fees: export credit – pre-completion margin: 0.08% pa, post-completion: 0.49% pa, commitment fee: 0.25%
Signing: 9 September 2004
The Youngduk wind-park project is the first commercially operated windmill project in Korea and the first limited-recourse financing for a greenfield project arranged and fully underwritten by a foreign bank in Korea.
It is also the first project-finance transaction backed by Danish ECA EFK. According to Lars Kolte, managing director of EKF in Copenhagen, the deal was a huge challenge. “The South Korean market set-up for renewable energy is not yet refined from a non-recourse lending perspective,” he explains.
“However, BNP Paribas’s project-finance team in Singapore, assisted by its Australian and Korean colleagues, efficiently managed a very professional risk-mitigating process. Encouraged by the undisputable success of the first wind-farm project in South Korea, the local sponsor, the financing parties and the Danish supplier Vestas have just started working on a second wind project.”
Yowip is a 39.6MW wind-farm project located on hills near the city of Youngduk in the North Kyoungsang province of Korea. Backed by the Korean government’s support of wind-energy development, the YoWip site has been identified by the Korean institute of energy as one of 50 tested sites for wind farms in Korea. The development project will use wind turbines from NEG-Micon, which is now 100% owned by Vestas, Denmark – the market leader in wind-turbine generators, with over 35% of the global market.
