California-based SunPower, a subsidiary of French oil and gas giant Total, and Swiss independent power producer Etrion have secured financing for a 70 MWp PV project in the Atacama region of Chile.
The companies said Wednesday that PV Salvador, the special purpose vehicle (SPV) set up to finance the project, had recently signed a project financing agreement with the Overseas Private Investment Corporation (OPIC), the U.S. government’s development finance institution, to finance 70% of the projects approximately $200 million cost through long-term non-recourse project loan that will fully amortize over a 19.5-year tenor.
Etrion, Total and the projects initial developer Solventus will fund the remaining 30% equity share based on their ownership interests of 70%, 20% and 10%, respectively.Etrion has a $42 million credit facility from its major shareholder, the Lundin family, to its portion of the project. Etrion’s ownership in Project Salvador will decrease from 70% to 50.01% following initial payback of its investment and after 20 years of operations its share will decrease to zero.
Etrion CEO Marco A. Northland said, "We are excited to partner with Total, SunPower and Solventus on this landmark solar project that takes our business model beyond government subsidies. This is Etrion’s first project to be financed and under construction in the Americas, and we look forward to working with the same partners on future projects. Project Salvador almost doubles our installed capacity and is expected to grow our cash flow by approximately 50%, transforming Etrion into a global solar power generation platform."
Bernard Clement, senior vice president of business operations at Total New Energies, added that the project would "benefit from our affiliate SunPower’s record-breaking photovoltaic technology."
SunPower, which is currently 66% owned by Total, is set to start construction of the project in January. The majority of the installation will likely go online next year and fully completed by early 2015. SunPower will have a long-term fixed price operation and maintenance agreement with Project Salvador when it is completed.
"This project represents an important milestone for the energy industry, proving that solar can provide wholesale power at prices competitive with conventional generation technologies," said Howard Wenger, SunPowers president of regions.
Project Salvador will initially operate on a merchant basis where the electricity produced will be sold on the spot market and delivered to the Sistema Interconectado Central (SIC) electricity network, with the ability to secure future power purchase agreements (PPAs). The solar power plant will be built on 133 hectares (329 acres) leased from the Chilean government through a long-term concession. The facility will connect through the power infrastructure of Corporación Nacional del Cobre de Chile (Codelco).
Once operational, Project Salvador is expected to produce approximately 200 gigawatt hours of solar electricity annually, enough to supply electricity to some 80,000 homes.