The Sun shines further afield than Spain


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Coverage: Not available Sunday, 10th July, 2011
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The President of the United States, Barack Obama, at Nellis Air Force Base (Nevada), powered by Fotowatio Renewable Ventures. / John Locher (Getty)

The Sun shines further afield than Spain

Fotowatio becomes one of the world’s leading solar energy groups in only five years
Fernando Barciela

Not only the ‘Red Shirts’ win by scoring on the world stage. On the 20th of June, Spanish company FRV Fotowatio Renewable Ventures (FRV) managed to achieve something that perhaps even the executives there never had dreamed of: winning a tender to construct and manage a 150 (Mw) megawatt photovoltaic solar park in Australia, one that no more than 50 consortiums from around the world were bidding on. According to company president, Mr. Rafael Benjumea, it was a very unique tender being “one of the biggest in the world and the first one of the country that went out to international companies, the biggest in the sector”.

At FRW, which professes to be “the first global operator of photovoltaic parks”, they hope the triumph in Australia speeds up their already strong global growth rate (it is one of the three with the most growth in the sector). Founded in 2006, the company now has close to 241 Mw operating in Spain, Italy and the U.S., of which the majority (141 Mw) are still in Spain: a situation that will change in the next years, as almost all of the 1,500 Mw that FRW has in the development stage is outside of Spain, mainly in the U.S., the most important target market for the company.

That country is going through an unstoppable solar power boom, especially in Southwestern states, from California to Texas, where FRV is running or developing the majority of its solar parks. “Apart from us going to build 60 Mw this year”, says Mr. Benjumea, “between 2012 and 2015, we’ll construct several hundred more”. The manager explains that the strong sector increase in the the U.S. is due to regulations passed in 2008 and in force until 2016, which provide a stable framework for investments. “Some states like California,” he says, “force the power companies to buy this electricity and give investment grants for 30% of the total set up cost.” In others such as Texas, there still isn’t any state aid, but some power companies want to promote renewables. That is the case of Austin Energy, willing to pay a bit in order to have solar powered electricity.

Although recognizing that the sector in Spain is rather at a standstill due to the restrictive rules adopted by the Government in the last two years, Mr. Benjumea emphasizes that going overseas was not a response to these difficulties, but a result of a natural calling to go abroad for growth. “We started up the company in 2006”, he explains, “following the Government’s regulatory appeal, with a pioneering project, La Magascona (23 Mw), in Trujillo, but straight away, when renewables were still going well in Spain, we opted for going abroad, in view of the fact that they were passing favourable regulations in the U.S. or in Italy”. In 2008, FRV was already running in Italy, and the following year entered the U.S. with the purchase of a local company.

Apart from those two countries, FRV will take advantage of the Australian contract in order to widen its global presence. “We’ve identified some rather interesting markets such as South Africa, India and the Middle East, where they’ll start tendering bids”. Mr. Benjumea doesn’t have the slightest doubt that photovoltaics will multiply in the following years. He explains this is because the cost of the installations have come down alot, and each time lets the sector compete more with the rates. “Although the pool prices are between 60 and 70 Mw/hour, and ours still at 130 Mw/hour, we hope that the differential closes within a couple of years”. In view of the prospects, the company which already has turned over 100 million Euros in 2010, expects to double or triple their turnover in the next three or four years. Between 2012 and 2015 the majority of the 1,500 Mw under development will be up and running, which means seven times their current installed capacity.

How has FRV leveraged itself in international markets? One way is its integrated structuring, which allows them to ensure an efficient process from the planning stage to the running of the plant, so that their customers (generally power companies) can be confident that everything runs smoothly and at the least possible cost. Unlike other companies in the sector, that cover one or two stages of the process, FRV takes care of every step. “We develop, directly build or contract third parties and control the construction, finance and run the parks with an eye on the long term. We consider ourselves an industrial company that’s in the business of selling kilowatt-hours”. The company has 100 professional employees organized into departments which are replicated in all the countries where it is present; The U.S., Italy and now, Australia. “We have teams for development, new projects, management and construction contracting, solar park maintenance and structured finance”.

Moreover, FRV tends to be accompanied on its projects by partners who help reduce investment and contribute their specialization. BP Solar (which will build the project) and Pacific Hydro are participating in the Spanish-led Australian consortium. Another advantage is the ability to generate financing for the projects. “We finance each one of the operations through a bank pool, among which are Spanish companies who have gone with us into Italy or the U.S.”, said Mr. Benjumea.

Its no coincidence that two of the three FRV founders worked in the financial world. When it comes down to tackling matters of finance, their skills are unquestionable. The way they achieved the financing of the FRV launch at the moment of its creation in 2006 proves it. Before founding FRV, Rafael Benjumea worked in the department of Corporate Finance at Banesto, and his brother Jose, in Project Finance at Santander. A cousin of theirs, Borja Guinea Benjumea, worked at the time as an energy sector expert at a law firm.

To start up the company in 2006, the three of them needed 180 million Euros, which was the cost of the La Magascona project. “We went to see the banks” he says, “and we got 90% of the investment through loans backed up by Dexia and Santander”. The company put up the other 10%, in which they gave shares to three stakeholders: Qualitas Venture Capital, EFS Solar Sain/GE and Landon (Gallardo Family). It seems easy.


FRV Globally
Installed capacity & Under construction. In Megawatts

Operational Parks Mw Parks under construction Mw

Spain 14 141 1 11
U.S.A. 9 54 2 50
Italy 5 47 1 10
Australia* 1 150
(*) Being developed

Source: FRV El Pais

The most important 
market for the company
is the United States
One of the leverages
for growth has been
their integrated structure