PowerLight Corporation of Berkeley, California, a leading global provider of solar power systems, will export equipment and services for the development and deployment of a 1MW solar power project in Gwangju, Korea, thanks to a 15-year, US$7.8mn medium-term loan guarantee from US Ex-Im Bank.

PowerLight is the first US exporter to benefit from the new 15-year repayment terms available from Ex-Im to support US exports to renewable energy, water and hydroelectric power projects. The guaranteed lender is City National Bank of Los Angeles.

The privately-owned project located at the Kim Dae Jung Exhibition and Convention Center is the first solar power project of 1MW or larger in Gwangju, located approximately 200 miles south of Seoul.

PowerLight will design, develop, deploy and maintain the solar power plant, a Power Tracker system mounted over a parking facility at the convention center. The Power Tracker solar power system automatically follows the path of the sun throughout the day to maximise the panels’ energy generation, providing substantially more power than a fixed-tilt system.

The borrower, S&P Corporation of Gwangju, South Korea, will own and operate the project. The energy produced by the project will be sold to Korea Electric Power Corporation (Kepco) at a price set by Korea’s ministry of commerce, industry and energy for 15 years following the project commissioning.

The transaction is an Ex-Im structured finance credit, which is customised to address the specific issues of a smaller environmental project but entails lower transaction costs than traditional project finance.

“Ex-Im Bank’s ability to guarantee a 15-year loan enabled PowerLight Corporation to win this important contract because the extended repayment term was necessary to make the project commercially viable,” says US Ex-Im Bank board member Linda Conlin, who heads Ex-Im Bank’s Environmental Exports Program. “We believe that these extended terms will enable PowerLight and many US environmental exporters to be competitive in smaller renewable energy and other environmentally beneficial projects in international markets and support US jobs in these high-tech industries.”

“Ex-Im Bank’s loan guarantee was instrumental in helping PowerLight to get this important international project properly financed. Their outstanding 15-year repayment term, coupled with an attractive interest rate, helped ensure a successful export sale for PowerLight and a worthwhile project for our customer, S&P Corporation,” says PowerLight executive vice-president Howard Wenger. “We look forward to working on additional projects financed by Ex-Im Bank.”

Ex-Im Bank is offering repayment terms of up to 15 years for US exports for the following renewable energy projects: wind, solar photovoltaic, solar thermal, geothermal, ocean thermal, tidal and tidal stream power, wave power, and bio-energy. Also eligible for the 15-year term are US exports for water and waste water projects, and hydroelectric power projects.

The longer repayment terms are available in accord with an agreement of the Organisation for Economic Cooperation and Development (OECD) that permits export credit agencies of OECD countries to offer enhanced terms for renewable energy and water projects. The OECD agreement permits the 15-year term for renewable energy and water-related projects for a two-year trial period that began July 1, 2005, and the 15-year term for hydropower projects for a two-year trial period that began December 1, 2005.

PowerLight Corporation is a leading global provider of large-scale solar power systems, delivering unmatched experience and proven financial performance to commercial, public sector and residential customers. PowerLight designs, deploys and operates the largest solar power systems in the world, including Bavaria Solarpark, the world’s largest photovoltaic power project in Bavaria, Germany.

For the Bavaria Solarpark project, Ex-Im Bank guaranteed a US$5mn working capital line of credit to PowerLight from another California lending institution.