Latin America-focused solar developer Atlas Renewable Energy has secured a US$210 million loan from the Brazilian Development Bank (BNDES) to finance its 438MW Boa Sorte solar project in Brazil.
The financing marks the first time BNDES executed a loan using the dollar as a reference to a renewable energy project, setting a “new precedent” for project financing in Brazil and allowing projects with an US-denominated power purchase agreement (PPA) to receive such funding, according to the solar developer.
This was made possible due to a new regulation under the Law #14,286/2021 – known as the Foreign Exchange Law, as of 31 December 2022 – which allows exporters to sign power purchase agreements (PPAs) in US dollars with companies that hold authorisations such as is the case for energy trading companies.
“This new framework allows electro-intensive exporting companies to reduce their risk to exchange rate fluctuations, given that their products are traded in dollars and the electricity consumed, being an important input to produce goods, can also be purchased at prices linked to the dollar,” said Daniel Barreto, superintendent of the BNDES Energy Area.
For Atlas Renewable Energy it is the third such renewables project financed in US dollars in Brazil, but the first one issued by a public bank, said Luis Pita, general manager of Atlas Renewable Energy in Brazil.
The solar PV project – which will comprise of eight solar PV plants – will be built in the south-eastern Brazilian state of Minas Gerais, and will provide energy to an undisclosed Brazilian industrial company under a 20-year PPA.
Moreover, the project is being developed by Atlas Renewable Energy through a joint venture with Norwegian renewables developer Hydro Rein.
Atlas Renewable Energy, which was acquired by fund manager Global Infrastructure Partners (GIP) and private equity firm Actis in October 2022, recently began operations on its 300MW solar PV project in Mexico.