Solarpack Secures Landmark Financing Deal for Peru’s San Martin Solar Plant: Spearheading Renewable Energy Expansion in Latin America

Solarpack has finalized a significant financing agreement for the San Martin solar PV plant in Peru, securing a total funding of $176.6 million. The financing deal, structured as a project finance arrangement, involves leading lenders such as BBVA, BNP Paribas, Crédit Agricole Corporate and Investment Bank, and Natixis Corporate & Investment Banking.

This marks a milestone as the first renewable project in Peru to be financed based on a Power Purchase Agreement (PPA) between private entities. The financing is designated as green financing under Solarpack’s Green Financing Framework, aligning with the Green Loan Principles set forth by the Loan Market Association, aimed at promoting environmental sustainability initiatives.

The San Martin solar plant, with an impressive installed capacity of nearly 300 MW, is currently in the construction phase. Once operational, it is anticipated to generate over 819 GWh annually, meeting the electricity needs equivalent to more than 440,000 homes and preventing the emission of approximately 564,000 tonnes of CO2 per year. Notably, it stands as the largest solar plant in Peru’s history.

Luis Alvargonzalez, Solarpack’s Chief Financial Officer, expressed confidence in the company’s credibility, business model, and management, highlighting the trust major international financial institutions have placed in Solarpack.

In July 2023, Solarpack inked a crucial power purchase agreement with Kallpa Generación, a key player in Peru’s power market, to support Kallpa’s decarbonization objectives. This financing bolsters the project’s role in advancing Peru’s power sector decarbonization efforts and fulfilling Kallpa’s commitments to its clientele.

This initiative underscores Solarpack’s dedication to providing renewable energy solutions across the Latin American region, fostering growth and sustainability. Additionally, alongside the senior financing package, the project secured a revolving credit facility of up to $19 million with BBVA to meet working capital needs during construction.

Several esteemed institutions, including legal advisors Milbank and Garrigues, technical and environmental advisors Mott MacDonald, and insurance advisor Willis Towers Watson, played pivotal roles in facilitating the transaction. Solarpack received legal counsel from Clifford Chance and Estudio Rodrigo Elias & Medrano.

Currently, Solarpack boasts ownership of 343 MW of renewable energy projects in Peru, spanning construction and operation phases, further solidifying its commitment to renewable energy development in the region.