Financial expense, net

9 Months Ended

Sep. 30, 2023

Note 19. - Financial expense, net

Financial income and expense

The following table sets forth financial income and expenses for the nine-month periods ended September 30, 2023 and 2022:

	For the nine-month period ended September 30,
	2023		2022
Financial income	($ in thousands)
Interest income on deposits		15,099		3,812
Interest income from loans and credits		2,046		994
Interest rates gains on derivatives: cash flow hedges		269		1,127
Total		17,414		5,934

	For the nine-month period ended September 30,
	2023			2022
Financial expense	($ in thousands)
Interest on loans and notes		(260,868	)		(211,484	)
Interest rates gains/(losses) on derivatives: cash flow hedges		17,785			(31,724	)
Total		(243,083	)		(243,208	)

Interest expense on loans and notes primarily include interest on corporate and project debt.

Gains and losses from interest rate derivatives designated as cash flow hedges primarily correspond to transfers from equity to financial expense when the hedged item impacts the consolidated income statement. The decrease of losses and increase of gains in the nine-month period ended September 30, 2023 compared to the nine-month period ended September 30, 2022, is due to an increase in the spot interest rates in 2023 compared to 2022, which implies lower interest payments on the derivatives instruments contracted.

Net exchange differences

Net exchange differences primarily correspond to realized and unrealized exchange gains and losses on transactions in foreign currencies as part of the normal course of business of the Company.

Other financial income and expenses

The following table sets out Other financial income and expenses for the nine-month periods ended September 30, 2023, and 2022:

	For the nine-month period ended September 30,
Other financial income / (expenses)	2023			2022
	($ in thousands)
Other financial income		7,836			15,128
Other financial losses		(19,847	)		(16,582	)
Total		(12,011	)		(1,456	)

Other financial income in the nine-month period ended September 30, 2023 include an income for non-monetary change to the fair value of derivatives of Kaxu for which hedge accounting is not applied for $1.1 million, and $3.8 million of income further to the change in the fair value of the conversion option of the Green Exchangeable Notes (Note 14) in the period ($6.2 million and $6.8 million of income respectively in the nine-month period ended September 30, 2022).

Other financial losses primarily include guarantees and letters of credit, other bank fees and non-monetary interest expenses for updating the present value of provisions and other long-term liabilities reflecting passage of time.