IDB Invest structured its third bond for the financing of renewable energy in Uruguay
The two refinanced solar plants are already operational and generate a saving of 79,000 tons of polluting emissions per year.
IDB Invest, the private sector institution of the Inter-American Development Bank (IDB) Group, provides financing for El Naranjal and El Litoral, two solar photovoltaic plants located in the department of Salto, in Uruguay. The financing package, of $114.4 million, includes the issuance of a senior B bond and a subordinated bond, and will contribute to the refinancing of the plants. The project is the third one that IDB Invest finances in Uruguay using this structure, the first with subordinated debt. The company that owns the projects is Atlas Renewable Energy, a leading company in Latin America in the development, construction and operation of renewable energy projects.
The El Litoral and El Naranjal solar plants, operating since June and September 2017 respectively, generate approximately 135 GWh of renewable energy per year, which means an average annual displacement of 79,000 tons of equivalent emissions of carbon dioxide. Both facilities represent 75.8MWp of solar capacity to the grid and will sell the power to the state company National Administration of Power Plants and Transmissions (UTE) for the next 25.5 years.
The IDB Invest financial package consists of a senior loan of $103 million, with $5.5 million funded with IDB Invest equity and the rest through a bond issue in the private market (B bond). The tenor of this financing is 24.5 years. The refinancing is complemented by a subordinated debt package, consisting of a subordinated IDB Invest loan of $11.5 million, of which $0.6 million is funded by IDB Invest and the rest through a subordinated B bond, both with a tenor of 15 years. DNB Markets Inc. acted as co-founder and placement agent of the B bond issue.
The financing structure with B bonds facilitates the development of an alternative financing source through the capital markets. The combination of both types of financing allows IDB Invest to contribute to the mobilization of a greater number of institutional, local and international investors, and helps direct more resources towards the renewable energy sector.
During the lifespan of the project, 1.9 million tons of emissions will be displaced. The two solar plants will contribute to the country's objective to add new sources of electricity from renewable energies and will increase the diversification of the Uruguayan energy matrix. Uruguay is an international example of how to transform a country's energy matrix successfully. Since launching its renewable energy program, the growth of the wind and solar energy market in the country has increased exponentially, from 1.3 percent of the total energy generated in 2013 to 32.2 percent that reached in 2017.
About IDB Invest
IDB Invest, the private sector institution of the Inter-American Development Bank (IDB) Group, is a multilateral development bank committed to supporting Latin America and the Caribbean businesses. It finances sustainable enterprises and projects to achieve financial results that maximize economic, social and environmental development for the region. With a current portfolio of US$11.2 billion under management and 330 clients in 23 countries, IDB Invest works across sectors to provide innovative financial solutions and advisory services that meet the evolving demands of its clients. As of November 2017, IDB Invest is the trade name of the Inter-American Investment Corporation.
Atlas Renewable Energy (Atlas) is a renewable energy company that develops, builds and operates renewable energy projects with long-term energy contracts throughout Latin America. Atlas has a portfolio of 800MW of projects contracted in stages of development, construction or operation, and aims to grow an additional 1.5GW in the coming years. Launched in early 2017, Atlas includes an experienced team with the longest track record in the solar energy industry in Latin America. The company is recognized for its high standards in the development, construction and operation of large-scale projects. Atlas's parent company, Actis, is a leading private equity investor in the emerging markets energy sector. Atlas is part of Actis Energy Fund 4 and has been allocated more than US $ 600 million of capital to invest in long-term renewable energy projects. Atlas's growth is focused on the main emerging markets and economies of Latin America, using its proven development, commercialization and structuring know-how to bring clean energy to the region. By keeping community and stakeholder participation at the center of its project strategy, Atlas works every day to provide the world with a cleaner future.