Everything News Jobs Opportunities Events Products/Services
Go to Home
Sign Up Sign in

CSP Today

26 Jun 2013 10:06:58

PV developer and Investor joint-ventures: a strategy for commercial success in Chile

Recently Mainstream Renewable Power announced a joint venture with Actis Investment meaning its financing needs for a large pipeline of projects will now be assured. With little experience in Chile for renewables, this rare form of partnership could be the most viable but difficult means of getting projects into production.

Earlier in the month Mainstream Renewable Power announced a joint venture with the global investment firm Actis. The joint venture company in Chile, of which 40% will be owned by Mainstream and 60% by Actis, will purchase the projects developed by Mainstream at financial close. At present, Mainstream has over 600MW of wind and solar in development, the majority of which is destined for industrial off-takers such as mining companies.

Securing a buyer for these projects eliminates a lot of the concerns financiers will have. Debt and project financing should certainly be easier to come by and the level of due diligence that Actis will undertake also validates the viability of the project. This partnership also makes projects more attractive to off-takers who are attracted to the security of the scheme.

This relationship is very rare and a first in Chile, it is easy to see why it would be difficult to secure a partnership of this kind, especially. However, looking for capital and investment from international banking houses may be the only option for the time being. At present, of 24 banks in Chile, only 7 have experience in renewables and only 1 or 2 have any experience in solar PV. Thus, there is a gap in understanding and experience which, unless addressed could seriously hamper the involvement of local banks in financing solar.

Whilst international commercial banks are in Chile, and have the requisite experience they are also more cautious, waiting to see the results of plants financed by larger multilateral agencies such as the IFC and Inter-American Development Bank

However, with such a competitive market, and a global downturn on PV financing, commentators are bound to wonder which developers will get project financing. As Rodrigo Violic, head of deals at Banco BICE recently pointed out, the solvency and experience of developers is paramount in lowering risk. It is notable that both Mainstream Renewable Power and Solar Pack (which has received IFC loans) are both international companies, although are notin the top 10 of developers globally.

It is unlikely in the meantime that Chilean companies operating without support or partnerships with international companies will be seen as an attractive risk. Joint-ventures are win-win for both sides and essential in stimulating a profitable and sustainable domestic industry able to bring the price of PV down further.

Discussion Thread  


Related Categories

Clicking a category below will direct you to a list of related information

Skip Navigation Links.

CSP Today Community

Linked Items From CSP Today

  1. Rigorous testing and maintenance strategies for modules key to ensuring long-term yield for PV...

    06 Jun 2013

Related Items From Everyone

  1. The Daikin Altherma Flex is a modular system consisting of one outdoor unit, which can connect to...

    15 Feb 2013
  2. Totnes Solar Organisations

    Totnes Solar specialises in design, installation and maintenance of solar...

  3. UK gas and electricity market regulator, Ofgem, has advised EnergyPark Peterborough that it has...

    13 Dec 2011
  4. Oxford home Case Studies

    The Smith family chose to install Mitsubishi Electric PV panels as an investment at retirement as...

  5. With the closing date set for 9th June 2011, HomeSun, the UK's leading solar panel experts and...

    02 Jun 2011

Go To Home

Resource Links

We're social: View Available Feeds Find out more! Leave us your feedback


We appreciate all feedback. Please leave as much or as little as you like about any aspect of this website.

If your message requires a response, please leave your email address.