Project Status

The AndaSol project companies Milenio Solar S. A. and AndaSol-2 S. A. have already successfully initiated all steps for the implementation and permitting as independent renewable power projects in Spain in accordance with Royal Decree 2818/1998 and its subsequent modifications. In March 2003 the first two AndaSol projects have been officially acknowledged as eligible solar thermal electricity production facilities by the Junta de Andalucia and have been registered in the national registry by the Ministry for Economy.

With the progress of permitting, the AndaSol partners Solar Millennium and ACS-Cobra have also been successful in identifying further interested equity investors in the European utility sector and European debt financing institutes, among them the European Investment Bank. At the latest since the publication of RD 436/2004 — in which the Spanish government strongly supports the long-term market introduction of solar thermal power — investors and institutional and commercial lenders demonstrate a strong interest to add commercial solar thermal projects into their investment portfolio.

In parallel to the project development in Spain, Solar Millennium AG together with Flagsol GmbH and SBP further optimized and qualified the SKAL-ET collector design with the financial support of the German Ministry for Environment in the 4350m2 SKAL-ET test loop at the SEGS plants in Kramer Junction (California) in order to provide EPC bidders, financing banks and equity investors with a commercial scale reference. With this experience, Solar Millennium AG with the technical support of Flagsol GmbH developed for the project company Milenio Solar S. A. the detailed EPc specifications.

In spring 2003, Solar Millennium AG with the technical support of Flagsol GmbH started the pre-qualification process of critical key subsystem and component suppliers and the negotiations with interested EPC contractors. A basic project description for discussion with investors and financing institutions was drafted in summer 2003.

A cooperation agreement for the implementation of the AndaSol projects was signed with the Spanish ACS-Cobra group in September 2003. Cobra with its 13.000 employees worldwide is a well-known and experienced turnkey contractor for power plants and industrial installations in Europe, Africa, Asia and Latin America. Cobra is the industrial department of the ACS group, which is after the merger with Dragados, the third largest construction company in Europe with 92.000 employees and annual revenues of € 10,8 billion. After successful investments in the Spanish wind energy market, ACS in
partnership with Solar Millennium wants to establish commercial concentrated solar power in the Spanish, Southern European and Mediterranean renewable power market.

The plant will be established as an Independent Power Producer (IPP) project and will be owned by the project company. The AndaSol projects have been developed and planned by Solar Millennium AG through its Spanish local independent project companies. Shares of the two project companies, Milenio Solar S. A. and AndaSol-2 S. A. will be offered to individual and institutional investors in the Spanish national and European market. Participants may also include the Spanish EPC contractor, interested electric utility companies as well as regional development organizations and regional banks. Various national Spanish industrial companies and regional banks already expressed their high interest to participate in the project companies and to provide financing for the AndaSol projects. A sketch of a potential project implementation structure can be found below.