SunEdison announces financial close on largest merchant solar project in Latin America

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SunEdison has announced financial close on a 50MW solar plant in Chile, which it claims is Latin America’s largest operational PV plant and also one of the biggest PV projects in the world operating without subsidies.

An investment consortium led by EverStream Energy Capital Management and financial services firm Claro Y Asociados, confirmed financial close of the 50.7MW 'San Andres' power plant.

“As one of Latin America's first merchant solar plants, the San Andres merchant PV plant demonstrates that solar PV is already a competitive energy source in countries like Chile,” said Jose Perez, SunEdison vice president and head of Europe and Latin America. 

Set in the desert conditions of the Atacama region, near the city of Copiapo the San Andres project is grid connected to the Central Interconnected System (SIC), and has no set power purchase agreement (PPA). Prices are determined by the spot market, often used by mining facilities in Chile to meet extra demand. Due to high solar radiance in the Atacama region, and pricing on the spot market, the 50MW solar power project is economically competitive with fossil fuels, with no subsidies.

“As one of the largest solar merchant power plants in the world, this project will bring advanced solar generation technologies and advanced operation and management practices to Chile, while having a significant positive impact on the environment, local businesses and people,” said PJ Lee, managing partner of EverStream.

The San Andres project previously caught the attention of solar economists with its initital US$100 million financing deal for the construction of the precedent-setting project, announced in November last year. Debt finance of US$62.9 million was awarded by Overseas Private Investment Corporation (OPIC).

In November, Elizabeth Littlefield, OPIC’s president and CEO said: “OPIC is excited to support this landmark project which will help Chile take advantage of its solar potential, increase access to energy, and create local jobs.”

The International Finance Corporation (IFC), part of the World Bank also provided a loan of US$37.5 million for San Andres.

“This project proves that with the right sponsors, domestic environment and financiers, debt financing has become a viable option for merchant solar plants. IFC's support is a continuation of our strategy to promote commercially competitive renewable solutions in Chile and the wider region,” said Jean Philippe Prosper, IFC vice president for Sub-Saharan Africa, Latin America and the Caribbean, back in November when the deal was brokered.

Also Netherlands-based international financial institution, Rabobank provided a local VAT facility, for the equivalent of US$25.6 million for the solar plant.

Thomas Emmons, head of project finance for Rabobank in the Americas said in November: “Our support of both the San Andrés and Amanecer Solar CAP projects signals our belief in the long-term prospects for renewable energy in Chile.”

SunEdison is also constructing a 92MW solar plant in Chile, and should have reached 75MW completion on another 100MW project in Chile this quarter, which greatly bolstering Chile’s installed capacity for January 2014. 

Chile has previously had issues with its PV project pipeline, in excess of 5GW, projects have been slow to get built due to land, grid and financing issues, but recently construction and completed solar project rates have increased significantly, signalling a start to Chile realising its solar pipeline potential.

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