Financial debt

 

At the end of 2012, EDPR’s financial debt was 3.9 billion euros (+1% year-on-year), being c. 76% of it loans with EDP Group while the remaining is debt with financial institutions, mostly related to project finances.

Net Debt totalled 3.4 billion euros in 2012, decreasing 33 million euros given that the Operating Cash-Flow and the first instalment of the asset rotation strategy more than covered the investment activities and the debt service of the period.

EDPR’s debt has a long-term profile. Most of the debt matures beyond 2018. Loans with EDP Group are closed for a 10 year period at fixed rates. Project finances also have a long-term duration. Such strategy enables the company to match its financing costs with its operating cash-flow profile.

76% of EDPR’s financial debt was contracted through shareholder loans with the EDP Group – EDPR’s principal shareholder –, while loans with financial institutions represented 24%. To continue to diversify its funding sources EDPR keeps on executing top quality projects enabling the company to secure local project finance at competitive costs. In 2012, EDPR signed three new project finances for a total of 274 million euros for projects in Spain (125 MW), Belgium (57 MW) and Romania (57 MW). Moreover, all of EDPR’s wind installed capacity in Romania (285 MW) has now project finance structures fully secured (238 million euros).

As of December 2012, 57% of EDPR’s financial debt was Euro denominated, while 39% was funded in US Dollar given the company’s investments in the US. The remaining debt is mainly related to funding in Polish Zloty and in Brazilian Real.

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92% of EDPR’s debt is at fixed rate

92% of the financial debt is at a fixed rate and most of it c. 80% has a post-2018 maturity. EDPR continues to follow a long-term fixed rate funding strategy to match the Operating Cash-Flow profile with its financing costs, therefore mitigating its interest rate risk.

As of December 2012, the average interest rate was 5.2%, a 20bps decrease vs. December 2011, reflecting the long-term maturity of the current debt and the attractive rates closed in the latest funding.