The Latin American solar market is maturing fast. Major multilateral lending institutions are continuing to pour debt into the market, giving projects the fuel they need to begin construction.
A 160-megawatt power-purchase agreement was recently signed with a Chilean utility. In addition, some notable M&A activity has made this one of the biggest quarters for company-level transactions in Latin American solar history.
M&A and capital markets activity heats up
Grenergy just went public on the Spanish Alternative Investments Market to shore up capital and expand its Latin America solar portfolio. The company has 1.5 gigawatts of solar projects in Mexico, Peru and Chile. Solairedirect, which has been very active in Chile and Mexico, was recently acquired by Engie after deciding against an IPO.
This caps a big quarter for M&A activity that included SunEdison's purchase of Honduran-focused GME from Actis and a right of first offer agreement with Solarpack in Peru.
Projects enter late-stage development with PPAs and financing
A 20-megawatt project in Jamaica, developed by WRB, may finally move forward after receiving financing from the Overseas Private Investment Corporation. The Inter-American Development Bank provided $85 million for 70 megawatts' worth of projects in Uruguay being developed by Sky Solar.
Enel Green Power is building a 160-megawatt project in Chile under a PPA with Endesa (a local utility that is majority owned by Enel). In addition, the International Finance Corporation is providing $60 million to Banco Consorcio for renewable projects in Chile.
Small steps in the Caribbean and Central America
The company Nacascolo is seeking approval to build a 10-megawatt solar plant in Costa Rica. This is the first large project since the new PV policy was released. Tax breaks for PV in Nicaragua were extended right before they expired.
Finally, 3.2 megawatts have been installed under net metering in the first quarter alone in the Dominican Republic, potentially putting the country in the top five markets for distributed generation this year.
Brazilian PV policy continues to improve
Six Brazilian states have now passed exemptions on the electricity VAT for solar, dramatically improving PV payback economics. These states have high concentrations of residential customers. Minas Gerais can be counted loosely as a seventh state, although the exemptions are structured slightly differently. The state of Pernambuco is also considering a second solar auction after mixed success at the end of 2013.
Don't miss the newest Latin America PV Playbook coming out in July, densely packed with the most cutting-edge data and analysis on the solar market in the region.