Latin American Power obtains project finance for Chile’s largest wind farm

January, 2016 - Chile

Four Clifford Chance LLP offices and Chilean firms Carey and Cubillos Evans Abogados have helped Santiago-based Latin America Power (LAP) obtain long-term project finance worth US$306 million for its 185-megawatt San Juan wind farm in Chile’s northern Atacama region.

A syndicate of European multilaterals and international commercial banks sought counsel from five White & Case LLP offices, Barros & Errázuriz Abogados in Santiago, and NautaDutilh in Rotterdam for the transaction, which closed on 19 November. Kroman Reumert in Copenhagen advised Danish Eksport Kredit Fonden.

BCI and Banco Security, which provided San Juan with a separate credit line worth US$30 million to offset the project’s value-added tax (VAT) obligations, sought counsel from Larraín Rencoret Urzúa Abogados in Santiago.

It is thought that the Amsterdam offices of Freshfields Bruckhaus Deringer LLP and Hogan Lovells LLP advised LAP and the VAT lenders respectively, but this could not be confirmed prior to publication.

The 56 turbine San Juan wind farm will have an installed capacity of 185 megawatts once operational in 2016, surpassing the 115 megawatt El Arrayán wind farm to become the largest of its kind in Chile.

San Juan’s financing comes as solar and wind energy become increasingly attractive alternatives to conventional power sources in Chile. Market research published by Deutsche Bank in late October found the two renewable energy sources are now outperforming fossil fuels in local energy auctions for cost per megawatt hour of electricity. The news bodes well for the Bachelet administration, which wants to increase Chile’s renewables sector from 9 per cent of all power generated in the country to 25 per cent by 2025.

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