Enery BD RO SRL, part of the Austrian-based Enery Group, one of the leading players in the renewable energy sector in Central and Eastern Europe, recently secured 214.45 million euros through an innovative financing approach for its projects in Romania. It’s not just about investing money; it’s about how companies manage risk and optimize financing, as we learned from Sebastian Staicu, Vice President for Financing at Enery Romania. We also discussed the company’s future plans, from developing its energy supply business to offering battery operation services and exploring sophisticated financing models.

 

Hello, Sebastian! Please tell us a few words about the 214 million euros financing secured by Enery. What are its main components?

I should start by mentioning that, when it comes to financing, renewable energy players are quite different from the traditional utility companies. Most green IPPs are relatively young companies without a long history, so they primarily use project finance instruments. This means that financing large projects is based on the future cash flow the project will generate, rather than the overall financial health of the company. Creditors primarily look at how profitable the project is expected to be, rather than the company’s overall financial situation.

Under these conditions, each analysis tends to be complicated, and each financing is relatively risky compared to traditional corporate financing: when a company needs funds, it can issue bonds or shares or obtain loans based on the overall financial health of the business. In simpler terms, from the financiers’ perspective, project finance is a bet on a specific idea or project, while corporate finance is a bet on the company as a whole.

What we managed to achieve last year was securing long-term financing of 214 million euros in an agreement involving three major creditors: Banca Comercială Română, Erste Bank Austria, and UniCredit Romania. Approximately 120 million euros were allocated to refinancing Enery’s existing portfolio in Romania, while 90 million euros is earmarked for the construction of new renewable energy projects, including battery storage. This structure thus contributes to the consolidation of the company’s renewable energy portfolio.

 

What exactly prompted Enery to choose this hybrid financing structure for its portfolio in Romania? Why was this approach necessary?

There are several reasons, all with financial and administrative impact. First, consolidated financing management is much simpler than managing multiple separate financings. Second, risk diversification allows us to obtain better financing terms. Additionally, we wanted to achieve a merger within the group, consolidating several companies that own small operational parks. This process is not yet finalized, but it will bring significant commercial advantages.

 

What are the key performance indicators (KPIs) that creditors monitor?

The main indicator creditors track is the cash flow generated by our entire portfolio, analyzed according to the specifics of each asset, to get an overall picture of the financial stability of the investments compared to the repayment profile of the loan. We have a repayment schedule, and every six months we reevaluate the data and financial model to confirm our continued ability to meet our obligations. Additionally, an important parameter is the financial buffer we maintain in our financial projections to protect against potential price or production declines; this gives our creditors confidence that we can handle financial adversities.

I should also mention the performance of battery storage systems. Given the complexity of integrating these systems into renewable energy projects, their performance can significantly influence operational efficiency and financial results. Batteries come with challenges, but they are crucial for maintaining the efficiency and financial viability of renewable energy projects. Lenders monitor the excess cash-flow generated by the whole perimeter, but especially the battery projects, in order to cash-sweep part of the excess cash generated and achieve a lower actual effective repayment of the loans.

As batteries are a new technology for Romania, lenders are also interested in monitoring periodically the construction of such projects to make sure they built in the desired quality, timeline and budget.

 

What are the advantages of this type of financing for Enery on one hand, and for the financing banks on the other?

The advantages are multiple. First, financing terms are better. Second, it allows us to invest in energy storage technologies, such as batteries, which are essential for moving closer to a hybrid portfolio. Additionally, consolidating financing simplifies project management. Instead of having separate teams for each project, we have a single team managing a consolidated portfolio, making one additional step to becoming mature IPP corporation. . Moreover, the merger between companies brings significant commercial advantages.

For the banks, this transaction represents risk diversification. Instead of financing a single project, they finance a diversified portfolio of projects, which reduces risk. Additionally, the banks trusted us due to the quality of the Power Purchase Agreements (PPAs) we signed with partners such as OMV Petrom, Orange, Nokian and Ursus Breweries and others — totaling several hundred GWh annually. These contracts provide a solid foundation for financing and offer the banks additional comfort.

Ultimately, we’re talking about a landmark transaction that reflects a certain expertise and capability in structured financing, somewhere between project finance and corporate finance, which translates into significant reputational benefits.

 

You mentioned investing in batteries. How do these fit into Enery’s strategy?

We aim to create a  hybrid portfolio, combining solar, wind, and batteries, to produce energy as close to real-time demand as possible. This financing allows us to invest in batteries and integrate these technologies in both existing and new projects. For example, we have a portfolio of approximately 235 MW of solar and wind projects and plan to install batteries with a similar capacity. This will help us optimize energy production and store it during peak hours.

 

What type of companies could benefit from this financing model? What is the ideal profile of a company that could replicate this approach?

This model is suitable for developers with a sufficient number of projects and solid PPAs. For example, if you have 6-7 projects and a diversified portfolio, this approach starts to make sense. For smaller companies with only 2-3 projects, it’s not necessarily feasible, as the complexity of the financial structure is not justified. However, for mid-sized IPPs it’s an excellent solution. There aren’t many in Romania, maybe 4 or 5. For smaller companies or start-ups, other financing options are more suitable.

 

Sebastian, you mentioned that Enery plans to expand in the near future. What are the company’s development directions?

In addition to geographic expansion, we are focusing on two main directions: developing the energy supply business and offering battery operation services. Regarding services, we aim to become a significant leading player in the Romanian market, offering green energy at competitive prices. By consolidating our portfolio and through the merger, we will be able to do this more efficiently.

We want to collaborate directly with large consumers, such as companies in the IT (i.e. data centers), cement & steel industry, automotive consumers, telecom, retail, or food industries. Through long-term PPAs, we can offer energy at stable and predictable prices, which is a major advantage compared to the spot market. We also want to offer customized solutions that allow them to reduce their carbon footprint and become more competitive, by investing in direct-wire PV plants and e-boilers within the industrial premises for heating.

In terms of capacities, we want to install over 3GW of PV and wind and over 2GWh of BESS in the next 3 years, especially in our core countries: Romania, Bulgaria and Estonia.

 

What about services for operating BESS? How do these fit into Enery’s strategy?

While we invest in our own assets, we also expand the management of third-party batteries across all available markets: day ahead, intra-day, FCR, aFRR, and mFRR, building the asset-light part of our portfolio. We have developed internal capabilities to operate and optimize storage assets, and now we aim to offer these services to other companies. For example, if a company installs batteries, we can operate these systems efficiently in combination with renewable assets or stand-alone, maximizing their yield and generating additional revenue. It’s an excellent opportunity to add value for our partners.

 

A question focusing on you personally! What other sophisticated financing models are you exploring in the future?

First of all we are interested in expanding this portfolio facility and add further lenders and projects We are open to exploring other financing instruments, such as uni-tranche structures that combine senior and mezzanine financing into a single loan, offering optimal allocation for developers.

However, we are also looking to simplify our financing model through issuing bonds and/or leveraged finance transactions.

 

What other sophisticated financing models are available in the western markets, which could help the energy transition in Romania.

Mini-perm are short-term financings arrangement with a large balloon payment at the end, allowing for smaller repayments during the loan term. Construction bridges are also something very popular for western lenders. I believe both will become increasingly popular in our region as well.

 

How do you see Enery’s role in the energy transition in Central and Eastern Europe?

As a regional player, Enery is actively contributing to the integration and strengthening of the European energy market. Our strategy focuses on expanding our energy supply business in Romania while also providing management services for co-located storage systems. Romania and Bulgaria have exceptional potential for renewable energy, particularly in solar, where yields surpass those in many other regions where we operate. While wind energy yields in these markets may not match those of Estonia, Lithuania, or Latvia, they remain highly competitive. These advantages drive our commitment to battery storage, a rapidly growing sector that plays a key role in our development strategy.

We are also witnessing major shifts in the energy landscape, such as the decoupling of countries like Estonia from Russian energy sources. As interconnection and cross-border collaboration continue to accelerate, Enery is determined to play an active role in shaping the future of Europe’s energy transition.

 

In conclusion, what message would you like to send to potential partners and investors?

Enery is committed to fostering innovative collaborations and exploring new opportunities, both through our own projects and by providing services to other companies. As renewable energy continues to play a crucial role in shaping the future of the energy industry, we believe that creative strategies and strong partnerships are essential to driving a successful energy transition.

With renewable technologies becoming highly competitive, industries such as IT (data centers), cement, automotive, telecom, retail, and food have a unique opportunity to engage directly with renewable energy producers. Long-term corporate PPAs, on-site power plants, battery storage, and demand response solutions empower businesses to secure stable energy prices, enhance sustainability efforts, and actively participate in the transformation of the energy market. Now is the time to seize this opportunity.