IFC together with DnBNOR, Nordea, West LB and Societe Generale were mandated joint lead arrangers in June 2010. IFC and DnBNOR’s willingness to provide the very long tenors of 20 years, and the other commercial banks providing 17 years, were essential to allow for the financial viability of this investment.
“This is a key milestone ensuring the funds for the construction of the project,” said Nils Huseby, Executive Vice President South America. “The timely closing of this financing has been the result of good team work both in the SN Power organization and among the five lending institutions. SN Power’s experience in working with IFC and the good cooperation from the commercial banks makes this a benchmark for future deals.”
DnBNOR has supported SN Power in several deals in Chile, and will also participate in the refinancing of SN Power Peru, which is taking place in parallel to the Cheves financing.
Nordea has, in addition to the Cheves project, been another financial key supporter of SN Power’s two hydro projects in Chile. West LB and Societe Generale are new investors to SN Power.
Located on the Huaura River, 250km north of Lima, Cheves is one of the very few hydropower projects developed in Peru in the last decade and therefore represents a cornerstone in Peru’s goal to promote the use of largely untapped renewable energy resources.
SN Power, through the project company Empresa de Generación Eléctrica Cheves SA, will build and operate the plant. Construction starts in January 2011 with completion in 2014.
“This project shows our commitment to developing renewable-energy resources in Peru and other emerging markets,” said Huseby. “It also sends a positive signal to developers and financiers regarding the investment opportunities in Peru’s renewable-energy sector and availability of long-term financing.”
Cheves is expected to produce about 836GWh of electricity annually starting in 2014. The increase in energy supply will serve individual households and industrial clients, such as mining projects. During the construction phase, the hydropower project is expected to employ about 700 local workers. SN Power will also continue implementing effective community-engagement programs.
Civil works on the project are being carried out by a Joint Venture between Hochtief Construction AG, Empresa Constructora Tecsa S.A. and ICCGSA Ingenieros Civiles y Contratistas Generales S.A. Other firms involved in the project include Rainpower, Jeumont Electric, ABB,
Abengoa Peru, Cempro Tech and Norconsult Peru.