CAF funds construction of two wind farms in Peru with Grenergy and ICO

This “Project Finance” includes the financing of senior non-recourse debt – linked solely to the asset and limiting the risk to the debtor – led and structured by CAF, and is the first renewable energy project financed by ICO in Peru. In addition, Sinia Renovables, a company fully owned by Banco Sabadell specialized in energy projects, has a 10% stake in both wind farms.

The Duna and Huambos wind farms will have an installed capacity of 36.8 MW, and will sell the power produced over a 20-year period to Peru’s Ministry of Energy and Mines, at a price between $37.7 and $36.8 per MWh, for an estimated annual production of more than 165,000 MWh.

Both wind farms are located in Chota, Cajamarca province, over 2,400 meters above sea level, and will be built by SIEMENS GAMESA. These are the first wind farms to be built in Sierra del Perú, a geographically strategic place thanks to its weather conditions, exceptional for generating this type of energy, with 5,000 net hours of wind per year.

The commissioning is scheduled for the end of Q2 2020. The project is part of the Peruvian Government’s ambitious plan to meet 60% of the nation’s energy demand using clean energy by 2025 and to electrify remote areas. To this end, the government publicly tendered the project in 2016, which was awarded to Grenergy over giants like Italy’s Enel or France’s Engie (GDF-Suez).

The Duna and Huambos wind farms come to reinforce Grenergy’s position in Peru, where it has been present with local headquarters since 2015. In addition, these projects are yet another step in consolidating the company in Latin America, and are part of the pipeline of the 2,500 MW solar and wind projects currently in different stages, diversified in strategic countries such as Chile, Peru, Mexico, Argentina and Colombia. Thus, Spain is firmly repositioned in the renewable energy sector.

According to Grenergy’s Managing Director and CEO, David Ruiz de Andrés,”these projects in Peru demonstrate the ability of renewable energy sources to supply clean energy at much more competitive prices than conventional power and in areas with no access to these conventional sources. Similarly, new legislation that allows the signing of long-term energy purchase agreements or PPPs would undoubtedly help improve competitiveness in our sector in Peru”

Also, CAF Vice President of the Private Sector Jorge Arbache noted: “We are pleased to have led the financial structuring of this project, which allows CAF to fulfill its catalytic role in Latin America, not only by mobilizing external funds and channeling them into the region, but by liaising with other financial institutions such as ICO, in the first joint co-financing project, and in a sector as strategic for Peru as renewable energy.”