Irish developer lands enormous €1.5 billion contract to build wind farms in Chile
Mainstream Renewables will now have to raise a massive amount of money to fund the project.
IRISH RENEWABLE ENERGY developer Mainstream has just landed a massive contract to build over half a dozen wind farms in Chile at a cost of $1.65 billion (€1.5 billion).
The Dublin-based developer announced today that it was awarded contracts by the National Energy Commission of Chile to build and operate seven utility-scale wind energy plants.
It is expected that the farms will cost a combined total of €1.5 billion to build. A spokesman for Mainstream said that the company would likely contribute about a quarter of the equity towards the development, while the rest will likely be sourced from banks.
The projects, which are tied to 20-year term contracts, are located throughout Chile and are scheduled to begin supplying energy into the grid from January 2021.
They will have a combined capacity of just under one gigawatt. For context, Ireland has about three gigawatts of wind energy installed across the entire country.
Mainstream chief executive Eddie O’Connor said that the he will be “meeting with the CEOs of the main wind turbine manufacturers in the coming months to discuss the next generation of turbines required for these projects”.
Finance
O’Connor, who also founded Irish electricity company Airtricity, added that the contract win showed that the firm was right to invest in emerging markets such as Chile and South Africa.
Mainstream CEO Eddie O'Connor
A spokesman for Mainstream told Fora that the company would likely look to sell on the wind farms once they have been fully developed, but would also likely to continue operating them.
“If you look at similar projects one of the biggest customers for them would be pension funds as there is a guaranteed revenue stream and we have contracts from 2021 to 2041, so it is a good match. Once they are sold we operate them on behalf of the buyer,” he said.
Mainstream won the contract in one of the largest tender competitions in Chile’s history, which saw 84 companies submit bids.
Chile
Since entering the Chilean market in 2009, Mainstream has built up a portfolio that includes over 40 developments.
Through its joint venture with emerging market investment firm Actis, Mainstream also has an additional 300 megawatts of wind projects due to start construction in Chile this year.
It was recently revealed that the Rockefeller fund, set up by members of the powerful Rockefeller family, is backing one of Mainstream’s projects in Africa.
The deal was the first direct investment that the fund had made in a renewable energy company as it looks to shed its ties to fossil fuels.
