Peru’s largest wind project reaches financial close

Natixis has raised $254m for Marcona and Tres Hermanas, two wind projects that together will form Peru’s largest wind farm.

Natixis has closed two financings totalling $254 million for Marcona and Tres Hermanas, two wind farms which together will have an installed capacity of 129.25 megawatts (MW)and make the combined project Peru’s largest wind farm.

According to the French bank, the financings are noteworthy because they involve various debt instruments, such as junior and senior debt; a variety of sources of liquidity; and a long tenor which is almost as long as the concession term.

According to the Inter-American Development Bank (IDB), the wind farms will sell 100 percent of their output to the Peruvian national grid, the Sistema Eléctrico Interconectado Nacional, under 20 year power purchase agreements with the government of Peru. The lender in September 2014 approved loans of $23.2 million and $44.1 million for Marcona and Tres Hermanas, respectively.

A month earlier, the Export Import Bank of the United States (Ex-Im Bank), approved almost $65 million for the export of American-made wind turbines, representing the bank’s first renewable energy transaction in Peru.

“This financing helps ensure that the turbines helping to power Peru are made here in the US by American workers, rather than in a competing country,” Ex-Im Bank chairman and president Fred Hochberg, said at the time.

Natixis did not identify any of the institutions other than to say that they included an export credit agency, several multilaterals and one commercial bank. Cobra, a subsidiary of the Spanish engineering and construction group ACS, is the owner of both projects.

The 32.1MW Marcona project – the country’s first commercial-scale wind project in operation – involves the design, construction, financing, operation and maintenance of the wind farm as well as the construction of the substation and transmission line.

The larger Tres Hermanas wind project, which is being built next to Marcona, involves the design, construction, financing, operation and maintenance of a 97.15MW wind farm as well as all engineering works, including access roads and a substation. The facility is expected to begin operating in December.

Natixis acted as sole institutional tranche underwriter, subordinated loan placement agent, and hedging provider for the twin projects. It acted as financial advisor and mandated lead arranger in partnership with Latin American development bank Corporacion Andina de Fomento (CAF). The two financial institutions also provided a bridge loan to finance the early construction costs of the Marcona project.

Listed on the Paris Stock Exchange, Natixis is the corporate, investment, insurance and financial services arm of Groupe BCE, the second largest banking group in France.