The Aurora solar project in Chile, showcasing its advanced solar panels and energy storage systems.
Clifford Chance has facilitated a significant financing deal worth $282.5 million for Zelestra, aimed at constructing the Aurora project in Chile. This innovative hybrid solar photovoltaic plant will be backed by a Battery Energy Storage System, enhancing its contribution to renewable energy. Located in the Tarapacá Region, the Aurora project boasts a remarkable capacity and is set to produce 600 GWh of renewable electricity annually, supporting around 200,000 households. The financing represents a transformative step for Zelestra and underscores Chile’s commitment to sustainability.
A significant advancement in renewable energy is underway in Chile with the completion of a $282.5 million green financing deal facilitated by the international law firm Clifford Chance. This financing is earmarked for the construction of the Aurora solar project, which stands out as a hybrid solar photovoltaic plant equipped with a state-of-the-art Battery Energy Storage System (BESS). The project is set against the backdrop of Pozo Almonte in the Tarapacá Region, a location strategically chosen for its solar energy potential.
The Aurora project boasts an impressive installed capacity of 221 MWDC (megawatts direct current) and 187 MWAC (megawatts alternating current), positioning it as a cornerstone of energy generation in the region. The BESS itself adds another layer of innovation with a maximum capacity of 187 MW and the ability to store up to 935 MWh (megawatt-hours). This means the plant can provide electricity even during nighttime hours, a critical feature for enhancing energy supply reliability.
The financing package was arranged in partnership with major financial institutions, namely Natixis Corporate and Investment Banking and BNP Paribas. Additionally, a value-added tax (VAT) facility was provided by BCI, a banking entity in Chile, which contributed to making this funding mechanism viable. This financing marks a significant milestone as it represents the largest funding initiative in Zelestra’s history, a notable achievement for the company.
Currently, the Aurora project is Zelestra’s first multi-technology venture, indicating a diversification of approaches in energy production. The project aims to generate approximately 600 GWh of renewable electricity annually, which is sufficient to power around 200,000 households in Chile. This substantial energy output is expected to play a vital role in the nation’s decarbonization efforts, alleviating dependence on fossil fuels while fostering a cleaner environment.
To further solidify its market strategy, the energy produced by the Aurora project is set to be supplied to Abastible, a local Chilean company, through a long-term Power Purchase Agreement (PPA). Such agreements ensure a stable revenue stream for Zelestra while providing Abastible with a reliable source of renewable energy.
Clifford Chance’s role in this financing not only underscores its commitment to promoting sustainable technologies but also showcases the firm’s legal acumen. The legal team that supported this initiative was led by global financial markets partner José Guardo, with essential contributions from counsel Eduardo Sánchez, senior associate Ángel Muñoz, and associates Alejandro Cubillo and Yago López based in Spain. The United States legal team included partner Fabricio Longhin and legal consultant Pedro Buchanan from the Washington D.C. office, as well as partner Darren Littlejohn from the New York office.
As the Aurora solar project progresses, it is anticipated to create a ripple effect in the local economy by generating jobs during the construction phase and beyond. The initiative also exemplifies a shift towards embracing green technologies, showcasing how infrastructure projects can align with global sustainability goals.
In conclusion, the Aurora project stands out as a beacon of innovation and sustainability in the energy sector. With the backing of Clifford Chance and major financial partners, this project promises not just substantial returns on investment but also a significant step towards achieving a more sustainable future in Chile and across Latin America.
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