Yinson Renewables, a subsidiary of Malaysian energy infrastructure firm Yinson Holdings Bhd has secured USD 59 million in funding for a 97-MWp solar project in Arequipa, Peru.
Peru's First Subsidy-Free Solar Project Secured Financing
The financing involves a loan to GR Cortarrama S.A.C., a subsidiary of Yinson Renewables, for the development and operation of the 97 MWp Matarani Solar plant in Arequipa, Peru. Notably, Matarani Solar plant is Peru’s first subsidy-free solar project to begin operations. The project is backed by a 15-year power purchase agreement (PPA) and financed through a project finance facility.
“We are thrilled to have successfully executed the mini-perm financing for the Matarani Solar project, marking a significant milestone for Yinson Renewables in Latin America. This achievement not only underscores our commitment to advancing renewable energy solutions but also highlights the importance of strategic partnerships with esteemed institutions like IDB Invest and Natixis. This collaboration is a testament to our shared vision of fostering sustainable development and addressing climate change. We look forward to continuing our work in Peru and beyond, leveraging these strong partnerships to drive future projects that contribute to a greener and more resilient energy landscape.” said Vegard Urnes, Chief Financial Officer of Yinson Renewables.
Solar Farm to Power 62,000 Households and Cut CO₂ Emissions
The plant is projected to generate around 260,000 MWh annually, helping to cut CO₂ emissions and meet the electricity demand of approximately 62,000 households in Peru. The plant will help decrease the country's reliance on thermal and hydroelectric power, while also enabling substantial savings in operating costs and optimizing the use of regional resources.
IDB Invest to Provide Climate Risk Advisory for the Solar Project
Additionally, IDB Invest will offer advisory services for the Matarani Solar Project, concentrating on climate risk assessment and adaptation to climate change. This includes conducting a climate vulnerability study to enhance the project's resilience, identifying further adaptation measures and risk management strategies. These efforts will ensure the project is better equipped to withstand climate impacts while adhering to environmental and social best practices.
With support from IDB Invest, the Matarani Solar project will produce clean energy and set a benchmark for financing renewable energy in Peru, showcasing the feasibility of subsidy-free solar plants in one of the world's most solar-rich regions. This initiative will aid in meeting the country’s emission reduction and sustainability goals.
The project is also expected to contribute to several United Nations Sustainable Development Goals (SDGs), including Affordable and Clean Energy (SDG 7), Decent Work and Economic Growth (SDG 8) and Climate Action (SDG 13).