Union Group has secured a USD59m financing package for two hydropower plants in Peru from a consortium of development banks.
DEG, FMO, OeEB and COFIDE have invested in senior debt in Union Group’s El Carmen and 8 de Ogosto plants which will generate a combined 27.4 MW of capacity and be linked by a 60km transmission line to the power grid.
Union Group subsidiary Generación Andina is building the plants backed by two 20-year power purchase agreements with the Peruvian Government.
The USD88m project marks the first stage of a plan to build nine hydropower plants with 125 MW of capacity in the country's mountainous Huanuco region in central Peru.
Across the country, Union Group is developing a hydropower portfolio of close to 1,000 MW of combined capacity. The nation's electricity consumption rose 5 per cent a year on average between 2004 and 2014, according to Peru's General Directorate of Electricity of the Ministry of Energy and Mines (MEM).
Construction was started on the two plants in the district of Monzón, Huamalies, in March 2014 and they are due to enter service in January next year (2016). More than 600 jobs have been created by the projects, 250 of them in the local communities, and 15 of the region's towns will reap the economic benefits with 50 per cent of income taxes ploughed back into the area.
El Carmen (8.4MW) and 8 de Agosto (19MW) will between them generate up to 215 GWh per year, which will be sold as part of power purchase agreements under Peru’s Renewable Energy Resource Program.
Juan Sartori (pictured), President and Founder of Union Group, says: “We are delighted to have brought this transaction to a close and we welcome the four development banks as strategic partners in this project. “Each of them share our long-term ambitions for the hydropower sector in Peru and our vision to deliver clean energy while creating jobs, encouraging economic growth and delivering investor returns.”
