Latin American renewables company Atlas Renewable Energy has raised a USD-indexed loan of $210 million from Brazilian development bank Banco Nacional de Desenvolvimento Econômico e Social (BNDES) for its 438 MW Boa Sorte Solar Power Plant that's contracted to supply power to aluminum producer Albras.
Pointing at the significance of this financing arrangement, Atlas says this is the 1st time that a public sector bank BNDES has executed a USD-indexed loan to a renewable energy project.
"It sets a new precedent for project financing in Brazil, making it available for projects with USD-denominated power purchase agreements (PPAs) specifically designed for large Brazilian companies which are large exporters," it stated. "The deal is also particularly significant given the new regulation under Law 14,286/2021 that allows exporters to enter into USD PPAs with companies that hold authorizations, which is the case of energy trading companies."
Under the 14,286/21 framework, energy intensive companies will be able to lower their exposure to exchange rate fluctuations by buying electricity at prices linked to the US dollar. "Having financing indexed to the dollar is not only in the interest of investors, but a crucial prerequisite for making the Boa Sorte project viable," said Head of Hydro Rein Brazil, Marcela Jacob.
Atlas is building the project under a joint venture (JV) agreement with Hydro Rein. Albras has signed up to procure 815 GWh annually from the project between 2025 and 2044 accounting for 12% of its total annual consumption (see Latin America PV News Snippets).
Boa Sorte Solar Power Plant is planned for Paracatu in the State of Minas Gerais. JinkoSolar has been contracted to supply 803,880 solar modules for the project which will be attached to Sungrow inverters. It is scheduled to become operational in 2023.
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