RESEARCH: Genneia - The windy company

23 June 2017
 
Argentine generator Genneia is undergoing an ambitious USD 809m capex plan to add 579.2 MW in installed capacity; 460.4MW in wind and 118.8MW in thermal. A key characteristic of the additional wind capacity is that aside from the power purchase agreement with CAMMESA, the Argentine government has established another guarantee, the Fondo Fiduciario para el Desarrollo de Energias Renovables (FODER), and Genneia purchased an additional guarantee from the World Bank.

Genneia’s 2022 bond covenants encompass the holding companies and the restricted subsidiaries. That is, the special purpose vehicles (SPVs), created to fund most of the wind farms are considered unrestricted subsidiaries. As a result, we think Genneia’s overall funding might exceed the 4x net debt/EBITDA threshold; however, that will not trigger an event of default as the leverage for covenant purposes will be lower.

CLICK HERE to access Genneia’s Credit Report.