OPIC provides $185 million in funding for a second large-scale solar project in Peru
The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution just approved its second solar project in Peru within a year. Last June $123 million were allocated for the construction of two 20 megawatt solar power plants. A year later, OPIC’s plans involve another two 20 MW solar plants – the approved funding for these is $185 million. Given the heavy activity over the past twelve months it can be assumed that Peru has become an attractive destination for investment in solar farms.
With only two large scale projects so far it might be early for any hard conclusions to be drawn, Peru’s solar potential is apparent and OPIC’s projects are specifically designed to fully utilize it. Last year’s project was called “2011 Latin American Renewables Deal of the Year” by Euromoney Institutional Investor. And the new project will enable the production of nearly 100 million kilowatt hours per year.
These initiatives offer opportunities not just for those investing in renewable energy projects, but also for the country and its population. Peru has one of the lowest rural electrification rates in Latin America, and today more than 6 million Peruvians still lack electricity. The push towards solar may help in that regard and the Peruvian government is fully supportive of such projects.
!m(/uploads/story/96/thumbs/pic1_inline.png)“The Peruvian government, in partnership with the private sector, continues to make great strides in bringing electricity to the majority of its population,” said Elizabeth Littlefield, President and Chief Executive Officer of OPIC.
She added that with the latest solar project Peru will be able to utilize “its great solar potential” and bring electricity to poorer areas where the need for it is greatest.
Speaking about the country’s solar potential, it should be noted that Peru definitely has some of the best conditions for developing solar energy projects. Energy levels in the southern mountain ranges exceed six kWh/m2/day, amongst the highest in the world.
The new OPIC funding will allow Conduit Capital Partners (CND), a private equity investment firm, to finance the development and the operation of the Tacna and Panamericana power plants, located in the Peruvian south. All the generated electricity will be sold to the country’s grid.
This is not the first time OPIC and Conduit are collaborating as the US government agency provided $60 million to the latest of Conduit’s three investment funds – the Latin Power III fund. The equity investment firm has been investing in the independent electric power industry in Latin America and the Caribbean, and owns more than two dozen projects in the region. In Peru Conduit has developed more than 1100 Megawatts of electricity generating facilities.
The US government agency, established in 1971, has a long and successful history of helping new and expanding businesses. It works with the US private sector and to date has supported over $200 billion of investment in over 4,000 projects, opening more than 276,000 American jobs.
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