Proparco has signed a 40 million dollar senior loan in favor of Grupo Enhol to finance the Illa project, a large-scale solar photovoltaic plant and its associated transmission infrastructure in southern Peru. Developed by Grupo Enhol, a Spanish renewable energy sponsor with more than 27 years of experience in the sector, the project will have a total installed capacity of 467 megawatt-peak (MWp) and is expected, according to Proparco, to become the country's largest solar plant when it enters into operation in 2027. The plant would contribute around 2.5% of national electricity supply and support the diversification of Peru's energy mix. This type of large-scale solar project fits into a broader global trend of photovoltaic capacity development, similar to the solar parks of Devnya in Bulgaria or Sinntal in Hesse, recently commissioned in Europe.

A 289 million dollar syndicated financing

Proparco's loan is part of a total syndicated financing of 289 million dollars, including a 250 million dollar mini-perm facility fully structured and underwritten by Banco Santander. Several development finance institutions are also taking part in the transaction alongside Proparco: Instituto de Crédito Oficial (ICO), Corporación Financiera de Desarrollo (COFIDE), Compañía Española de Financiación del Desarrollo (COFIDES), Fondo para Inversiones en el Exterior (FIEX) and Development Finance Institute Canada (FinDev Canada). These institutions are providing financing with a seven-year maturity, intended to support the project from construction through to operational maturity. According to Proparco, the mini-perm structure is designed to secure financing during the higher-risk construction and ramp-up phases, while preparing the asset for access to private capital markets once operational.

A first-time collaboration between Proparco and Banco Santander

The transaction marks Proparco's first infrastructure financing collaboration with Banco Santander, opening, according to Proparco, new opportunities for cooperation on projects across the Andean region. The Illa project is aligned with Peru's energy transition objectives, which aim to raise the share of non-hydropower renewable energy to 30% of the country's energy mix by 2030. This target is particularly significant as national electricity demand is expected to reach 75 terawatt-hours (TWh), driven by industrial and mining activities as well as rural electrification. By adding significant new solar generation capacity and associated transmission infrastructure, the project would contribute to the diversification, resilience and decarbonization of Peru's electricity system.

Expected environmental and social benefits

According to Proparco, the solar plant is expected to avoid around 369,000 tonnes of CO2 equivalent annually. The project would also contribute to broader socio-economic benefits, including improved access to essential energy services for an estimated 263,000 people and the creation or preservation of approximately 2,425 indirect jobs in Peru. Mr. Stanislas De La Riviere, Regional Director for the Andean region at Proparco, said the transaction illustrates the complementarity between the structuring and syndication capabilities of private financial institutions and the environmental, social and risk-sharing expertise of development finance institutions. Grupo Enhol, for its part, said the Illa project will become Peru's largest solar plant and one of the most significant renewable projects in the region, reflecting the group's long-term commitment to the country.