Siemens Gamesa secured financial backing from CaixaBank at a critical time as the wind turbine manufacture deals with a potential $4.5B in expenses. Aeris Energy in Brazil is on a slight losing streak but Phil Totaro believes their huge backlog will provide a financial windfall in the near future. Also in Brazil, EDPR is selling new wind turbine farms to Norwegian based Statkraft.

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News Flash September 4

Allen Hall: I’m Allen Hall, president of Weather Guard Lightning Tech, and I’m here with the founder and CEO of Intelstor, Phil Totaro. And this is your News Flash.

CaixaBank renewed the financing and, and working capital to Siemens Gamesa in the first half of 2023. Now this is important because Siemens Gamesa, and Siemens Energy just announced about $4.5 billion of upcoming expenses. So having a working capital line for Siemens Gamesa is really important right now, right, Phil? 

Phil Totaro: Absolutely. And there, look, with the situation that Siemens Gamesa finds itself in, there are two ways out of it. Either sell off an asset strip or invest and pull yourself out of this hole that you’ve sunk yourself into.

And I, I. You know, continue to get this kind of support from their banks and other, you know, finance partners to be able to pull themselves out of this out of this situation and out of this hole. So this deal with, with CaixaBank is, is important. 

Allen Hall: Will the banks ask Siemens Gamesa to divest of some their assets to back those loans?

Phil Totaro: Potentially, yes. And there are things that, you know, Siemens Gamesa as a whole and Gamesa in particular, still kind of owns that could be desirable to be divested. The question is how far do they go with that? You know, I think a lot of what they have, they probably want to keep it for operational or potentially sentimental reasons.

But the bank may in fact require those kind of guarantees or the asset divestiture to ensure that they’ve got the cash flow necessary to keep making debt service payments absolutely. 

Allen Hall: Well down in Brazil, Aeris Energy has reported about a $3.9 million loss in their second quarter down about 14% from last year at the same time.

Accumulative losses for the first half of the year are about eight and a half million dollars, which is up about 50% from the previous half year. Aeris is investing obviously because there’s a lot of activity down in Brazil and they, they poured in about six and a half million dollars into machinery and equipment to boost production capacity at their blade manufacturing plant.

Phil Aeris has a huge backlog with Vestas on blades. 

Phil Totaro: Exactly. They are, I believe, the exclusive supplier for the Brazilian market for the V150 Vestas product. And Vestas is also looking at bringing the the V162 production online. In the coming years as they start getting some orders for the bigger machines.

So I think even though their Aeris is showing a net operating loss in a few quarters here in 2023 long-term, I’m actually quite optimistic about their You know, their long-term prospects, their financial health and, and their order book as it relates to their relationship with Vestas. 

Allen Hall: Renewable Energy Company EDPR announced that it has sold two wind farms with a combined capacity of 260 megawatts in Brazil to Norwegian Power Company Statkraft.

The $320 million in assets were commissioned over the past 12 months. So Phil, these are new wind farms that are exchanging hands down in Brazil. 

Phil Totaro: Yes. And it’s enhancing Statkraft’s position in the market where I believe they’ve already got, I wanna say about five or six different wind complexes where they were.

They are the owner or they were at least partially involved in the development phase of the the assets. So having EDPR develop the project and Statkraft take it over is, is a great thing for, for both companies. It frees up more capital for EDPR and it gives Statkraft more assets in their.

In their portfolio in a, in a growing market. Brazil saw four plus gigawatts installed last year. They’re on track to see, you know, just as much if not more in, in onshore wind installed this year. So I think stat craft’s getting in early on, a market they see is, is going to continue to improve. 

Allen Hall: And EDPR is gonna continue to do what they call asset rotation.

They’re gonna try about seven and half billion dollars worth through 2026. So they’re gonna be building farms and selling farms. Very interesting in Brazil. 

Phil Totaro: And I think, again, this gives both companies a financial leg up. I. In a growing market where you’re gonna want to park money there and, and you’re actually gonna see a reasonable return.

Allen Hall: If you wanna learn more about mergers, acquisitions, and partnership in Wind Energy, check out our friends at Intelstor at intelstor.com.