Independent renewable power producer Innergex has announced the acquisition of the Salvador solar photovoltaic (PV) farm in Chile as well as 11-year power purchase agreements (PPAs) covering a total electricity generation of 54.6GWh annually.
Salvador and the PPAs were acquired from Etrion Chile, Total Solar Latin America, and Solventus Salvador at a net purchase price of $46.6m and $19.5m respectively.
Innergex president and CEO Michel Letellier said: “We are proud to announce the completion of our first acquisition with the proceeds from Hydro-Québec’s private placement.
“The acquisition of Salvador is a strategic one that not only generates a quick return on investment but also diversifies our energy portfolio in South America.
“Chile is a prime market for us as it offers top quality renewable energy resources combined with growing energy demand. This acquisition is another step forward in Innergex’s international growth and diversification strategy.”
Salvador is expected to produce 182.2GWh annually, sufficient to power over 70,000 households in Chile with clean energy. The asset is also expected to produce annual cash-on-cash returns of around 11% over the next ten years and reach an adjusted EBITDA of $8m in 2021.
Commissioned in 2014, Salvador delivers its total energy production to the Sistema Interconectado Central (SIC) power grid, where it gets a merchant market price.
The deal also includes the transfer of 11-year demand-based PPAs with Empresa Eléctrica ERNC 1, a power trading company, to Innergex. These PPAs could stand to benefit Energía Llaima, a joint venture in which Innergex has a 50% stake.
The total net acquisition price of $66.1m will be funded completely from Innergex revolving credit facilities. The project and the PPAs acquired are claimed to be free of project debt.
Located in Brown County, Ohio, Hillcrest solar PV project is expected to produce a gross estimated long-term average of 413.3GWh in the first five years of operation.