BNDES in debut $163m solar financing

The 192MW project, backed by EDF and Canadian Solar, is being funded through a long-term loan.

The Brazilian Development Bank has committed $163 million to finance a 192MW solar project being developed by renewable power producers EDF Energies Nouvelles and Canadian Solar.

The 18-year facility backing the Pirapora I project in Brazil is the first solar project ever to receive financing from BNDES. Funding is coming from the Brazilian Long Term Interest Rate, a subsidised rate that works as a benchmark for BNDES loans. The project is expected to begin operating this quarter and is contracted with a 20-year inflation-linked power-purchase agreement won in Brazil’s first reserve energy auction.

“This cornerstone financing from BNDES for the Pirapora I project demonstrates the total commitment from BNDES and the Brazilian government to support companies willing to invest in the long-term development of solar energy infrastructure in Brazil,” said Shawn Qu, Canadian Solar chief executive.

Pirapora I is part of a series of projects EDF and Canadian Solar are co-developing. The Canadian company has a 20 percent interest in the projects and EDF owns 80 percent. The second project in the series will generate 115MW and is expected to be finished in 2018. The third portion will begin construction this year and should generate 92MW.

EDF’s development pipeline with Canadian Solar is part of the company’s strategy to build out a clean energy portfolio in Brazil, according to a statement. The company first entered the Latin American market in 2015 through the purchase of a wind portfolio with a total capacity of around 800MW. Along with the solar projects, EDF is currently moving forward with a 400MW hydroelectric project. The power producer is targeting a 1.4GW portfolio in Latin America.