DNV market due diligence supports Innergex’s USD 156 million financing for renewables and storage in Chile
In a significant development, DNV has announced its support for Canadian-based renewable power producer Innergex in finalizing a refinancing and new financing package worth 156 million USD for a portfolio of renewable and storage assets in Chile. This transaction marks a crucial step in Chile’s energy transition and highlights the growing importance of renewable energy and storage solutions in the country.
DNV’s Role in the Financing Deal
DNV played a key role in facilitating the financing deal, providing independent market due diligence to lenders, including SMBC Group. The analysis conducted by DNV covered various aspects such as marginal spot price forecasts, capacity revenue projections, curtailment and transmission studies, power purchase agreement (PPA) modeling, and storage evaluation for assets with battery energy storage systems (BESS). This thorough analysis helped lenders understand the price and curtailment risks associated with the projects before committing funds.
Implications for Chile’s Energy Transition
The two new BESS projects financed through this transaction are expected to play a crucial role in Chile’s energy transition. These projects will help the country manage growing renewable curtailment, shift solar energy to evening hours when it’s most needed, and provide ancillary services to the grid. As Chile aims to phase out coal by 2040 and replace baseload thermal generation with storage solutions, the importance of projects like these becomes even more significant.
DNV’s Vice-president, Brice Le Gallo, emphasized the changing landscape of Chile’s electricity system and the challenges posed by rapid growth in renewables and storage. The successful financing of these projects demonstrates banks’ trust in DNV’s market analysis to support financing decisions and highlights the availability of financing for renewable and storage projects when backed by robust market analysis.
Looking Ahead
This milestone transaction sets a precedent for future BESS and renewable projects in Chile, signaling to developers that financing is available when market risks are clearly understood. The confidence shown by lenders in financing storage assets is crucial as Chile progresses towards a fully renewable grid. The transaction serves as a positive indication of the increasing support and investment opportunities in the renewable energy sector in Chile.
In conclusion, DNV’s support in securing financing for Innergex’s renewable and storage assets in Chile underscores the company’s commitment to advancing sustainable energy solutions and facilitating the transition towards a cleaner and more resilient energy system in the region.
