Enel faces up to $1.5 million fines in Russia over coronavirus delays

Enel claims it has faced force majeure circumstances in developing wind farms in Russia during the coronavirus pandemic and will try to convince customers not to collect fines

Blades being transported to Enel's 90MW Azov wind farm in Rostov, Russia
Blades being transported to Enel's 90MW Azov wind farm in Rostov, Russia

Enel faces fines in Russia due to the late commissioning of a 90MW wind farm, which has had construction delayed by the coronavirus pandemic.

Analysts at VTB Kapital have calculated Enel Russia could be fined up to RUB 129 million ($1.5 million) over its 90MW Rostov wind farm.

The developer has faced "force majeure circumstances that affected the schedule of construction and installation work," a spokesman told the Kommersant newspaper.

However, Enel could reduce the amount of these fines, if it persuades all of its customers – both state-owned and private company power purchasers – to sign agreements on force majeure circumstances and non-collection of fines.

By law, delays in the commissioning of wind power plants in Russia are subject to penalties of 25% of the mandatory capacity payments.

Enel is currently building three other wind farms in Russia with a combined capacity of 381MW, and has 15-year power supply contracts in place for these projects.

It expects a basic rate of return of 12% from the projects, and has committed to producing part of the equipment within Russia.

Enel had warned of the pandemic causing delays to construction at its two other Russian wind farms back in May.

Its 90MW Azov wind farm should have been commissioned by 1 December 2020, while the 201MW Kola project is due online by 1 December 2021.

The Kola wind farm – in which it plans to invest RUB 18.5 billion – could incur monthly penalties of RUB 289 million for the delay of its commissioning.

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