Independent power producer Etrion and Total have secured project financing for the construction of Project Salvador, a 70MWp solar PV plant in the Atacama Desert region of Chile.
A special purpose vehicle (SPV), PV Salvador, created to oversee the project, has signed a project finance facility agreement with US government development finance institution, Overseas Private Investment Corporation (OPIC).
Under the terms of the agreement, OPIC has offered long-term non-recourse project debt to the SPV in exchange for financing 70% of the projected US$200 million cost of construction. The first drawdown of the loan will come during this month with the loan set to amortise over 19.5 years.
Project Salvador is the latest in a series of large-scale PV plants announced for construction in Chile, where high levels of solar irradiance coupled with the nation’s investment grade rating have provided opportunities for finance institutions to offer non-recourse project finance. Late last month, OPIC agreed to finance US$100.4 million for a 50.7MWp project, to be built by SunEdison.
The remaining 30% of financing will come from Etrion, Total and Solventus, which was the initial project developer. Each company will fund an amount of equity proportionate to their ownership interests: Etrion will own 70%, Total 20% and Solventus will own 10%. Total also owns a 66% stake in SunPower, which will build, operate and maintain the plant as well as supplying panels and trackers.
Etrion will make an initial equity investment of US$42 million, owing to a credit facility given to the company by the Lundin family, its majority shareholders. Once the initial US$42 million has been paid back by Etrion, the company's ownership of the project will then decrease from 70% to 50.1%, then decreasing to 0% after 20 years.
As reported by PV-Tech, the project was announced in September as an unsubsidised plant, with electricity generated to be sold on the spot market. Total, Etrion and SunPower claim Project Salvador will therefore be the world’s largest merchant solar power station when completed.
Power produced will initially be delivered to electricity network Sistema Interconectado Central, with an option to be made at a later date to secure power purchase agreements (PPA). The power infrastructure of copper mining company Corporación Nacional del Cobre de Chile (Codelco) will be used to transmit electricity produced.
Howard Wenger, regional president of SunPower said: “This project represents an important milestone for the energy industry, proving that solar can provide wholesale power at prices competitive with conventional generation technologies.”
Construction is expected to begin in January 2014, with the plant scheduled to come online during next year and to reach full commissioning early in 2015.