Spanish energy company Abengoa started pre-insolvency proceedings on 25 November, which is set to have an impact on contracts and tenders in the Middle East.
The beginning of pre-insolvency proceedings comes less than a week after the firm signed a contract with Emirates Global Aluminium (EGA) to build a 220MW expansion of the captive power plant at its Al-Taweelah complex in Abu Dhabi.
MEED had reported recently that Abengoa was one of two bidders in negotiations with Saudi Electricity Company (SEC) for the main engineering, procurement and cosntruction (EPC) contract on the Waad al-Shamal 1,050MW integrated solar and combined-cycle (ISCC) plant in Saudi Arabia. The two bidders had submitted fresh prices in September for the integrated scheme, and as of late November, the client had still been evaluating the prices.
It is still in the early stages, so we will have to wait and see, a source close to Abengoa told MEED when asked about the impact on projects in the Middle East. The holding company, rather than the EPC company, is in negotiations with banks so we will have to wait and see how it progresses.
Share prices for Abengoa had fallen by 57 per cent over the past 12 months, with the company revealing in September that its gross debt was 8.9bn ($9.4bn).
The Spanish firm has been a major provider of renewable energy projects across Europe and the US in recent years. Some in the banking sector have attributed several of its major financial difficulties to the substantial reduction or removal of renewable energy subsidies in Europe over the past three years.