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Neo Energia seeks approval for second Galicia wind fund bond issue

Neo Energía, a renewables developer controlled by Portuguese utility Energía de Portugal (EDP), is seeking approval for its second bond issue to finance wind plant in the Spanish region of Galicia. The EUR 7.6 million issue covers 10% of investment in the 73 MW Dumbría wind complex by Desarrollos Eólicos (DESA), a veteran Spanish developer absorbed by NEO last year. Spain's stock exchange regulator, Comision Nacional del Mercado de Valores (CNMV), is expected to authorise the issue for release in October, says Rocio Sicre of Spanish utility Hidrocantábrico, a minority shareholder in NEO. In 2003, CNMV granted broad approval of DESA's plan to issue bonds totalling EUR 26 million, covering 10% of its 240 MW development concession for Galicia. In 2004, DESA -- then owned by Dutch utility Nuon -- won approval for the first issue on its 70 MW Monseivane-Celaya complex. The issue was fully subscribed in two days. The "wind fund," as Neo Energía calls it, forms part of the developer's promise to Galicia's regional government to provide a low risk opportunity to local investors in Galicia. As with its first issue for EUR 7.7 million, preference is given to businesses and private investors residing in districts close to the wind farms. "Yes, it's a more expensive method of financing, but it enables local communities to participate in nearby wind stations," says Javier Mateache of Neo Energía's Spanish branch. The approach provides "significant social capital" and can only "improve the local visual perception of turbines." Dumbría's first 40.3 MW phase is now being commissioned and building has begun on the second 32.5 MW phase. Both use Siemens 1.3 MW turbines produced under license by Galician firm Navantia, a supplier to the Spanish navy.

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