Norway-based energy company Equinor has signed an agreement with Portuguese company Martifer Renewables to acquire a 50% stake in the Guanizul 2A (G2A) solar project.

Located in Argentina’s San Juan region, G2A is an 117MW ready-to-build solar project, which has the capacity to generate enough electricity to power around 80,000 Argentine households with renewable energy.

The remaining 50% stake of G2A solar project will be acquired by Norwegian independent solar power producer Scatec Solar.

“Entering solar in Argentina builds on our strategy to develop from a focused oil and gas company to a broad energy major.”

Equinor New Energy Solutions executive vice-president Irene Rummelhoff said: “We are very pleased to have acquired a stake in this opportunity. We are entering a renewable market with growth potential through a mature and advanced solar project.

“Following a dramatic reduction in cost for solar, we are looking forward to working with our partner, the Argentinean authorities and the local supply chain to advance solar as a competitive source of energy.”

Additionally, the project was awarded a 20-year electricity offtake agreement (PPA) in December last year under RenovAr auction, which was held by CAMMESA, the Argentinian Electricity Regulatory Agency.

The final investment decision is expected later this year, with an estimated production start-up by next year.

Project capital expenditure (capex) is estimated at $95m and will be funded with 40% equity from Equinor and Scatec Solar, and 60% from a construction bridge loan provided for the consortium by Equinor, bringing a total Equinor financial exposure of $77m.

Argentina, which is reportedly the third largest power market in Latin America, has set a target to source 20% of its electricity needs from renewable sources by 2025.

Rummelhoff further added: “Entering solar in Argentina builds on our strategy to develop from a focused oil and gas company to a broad energy major and adds to the opportunities we have already established in Argentina.”

Completion of the transaction is subject to normal conditions and approvals from authorities prior to construction start.