Spanish developer Solarpack Corporación Tecnológica has closed a senior financing package for the 300MW San Martin solar plant in Peru for more than $176m.
The $176.6m agreement has been signed with lenders Crédit Agricole Corporate and Investment Bank, Natixis Corporate & Investment Baking, BBVA and BNP Paribas, using a project finance structure, being the first renewables scheme financed in Peru based on a Power Purchase Agreement (PPA) between private parties.
The loan has been qualified as a green financing under Solarpack’s Green Financing Framework that is in accordance with the Green Loan Principles, established by the Loan Market Association, which identify initiatives that promote environmental sustainability.
The San Martin solar plant, with a total installed capacity of almost 300MW, is currently under construction and is expected to generate more than 819GWh per year, equivalent to the annual electricity consumption of more than 440,000 homes.
In addition, it will prevent the emission of more than 564,000 tonnes of CO2 each year. It is the largest solar plant in Peru’s history.
“The closing of this financing once again demonstrates the great confidence that major international financial institutions have in Solarpack’s solvency, business model, and management,” said the company’s chief financial officer Luis Alvargonzalez.
In July 2023, Solarpack signed a PPA with Kallpa Generación, a leading generation and transmission company in the Peruvian power market that produces 23.44% of the country’s electricity, to support Kallpa’s own decarbonization goals.
This financing enables the project execution to proceed in the further decarbonization of Peru’s power sector and deliver on Kallpa’s commitments to its own customers, said Solarpack.
In addition to the senior financing package, San Martín has also closed a revolving credit facility with BBVA for up to $19m to fund working capital requirements during the construction of the project.
The following institutions advised on the transaction, on the side of the lenders: Milbank (legal advisor – New York); Garrigues (legal advisor – Peru); Mott MacDonald (technical advisor and environmental and social advisor); Willis Towers Watson (insurance advisor); Grupo Mercados Energéticos Consultores (market advisor); EY (model auditor and tax advisor). The following institutions advised Solarpack: Clifford Chance (legal advisor – New York); and Estudio Rodrigo Elias & Medrano (legal advisor – Peru).