Tapping the Sun to Bring Power to Peru: OPIC Funding Supports the Construction of Four Solar Power Plants
Sector: Infrastructure, renewable resources Challenge: More than six million people in Peru lack access to electricity. The country has some of the highest levels of solar energy in the world, but development of solar power plants is capital intensive.
Solution: OPIC is lending a total of $308 million to support two major solar projects.
Impact: The projects will increase the capacity of Peru’s national grid in a sustainable way and create local jobs.
In June 2012, OPIC approved a $185 million loan to enable New York-based private equity investment firm Conduit Capital Partners to finance the construction and operation of two 20 megawatt solar facilities Peru's rural south. .
The project, which is being sponsored by Assured Guaranty Municipal Corp., a New York-based public finance and infrastructure subsidiary of Assured Guaranty Ltd., is OPIC’s second major solar project in Peru. In June 2011, OPIC’s Board approved $133 million in financing for the construction of two 20-megawatt solar power plants, the first large-scale solar power project in the country. That project was named the "2011 Latin American Renewables Deal of the Year" by Euromoney’s Project Finance Magazine.
Peru is an attractive and logical destination for investment because it has issued a competitive bid to finance solar projects and it has emerged from the international financial crisis as an investment-grade country.
All electricity generated in the new plants will be sold to Peru’s national grid and will support the country’s initiative to diversify its sources of power generation, which has a strong base of renewable resources. Peru completed its first renewable energy tender in early 2012, and this project was among 26 hydro, wind, biomass and solar projects selected.
OPIC has long invested in emerging markets, and has increasingly focused on bringing renewable resources to these markets. In 2011 alone, OPIC committed $1.1 billion in financing to the sector. These projects represent not only an urgent global need, but also a significant investment opportunity.
This project was profiled in 2012