Mainstream raises $580m for Chile wind and solar projects

Mainstream Renewable Power, the emerging markets-focused green energy company founded by entrepreneur Eddie O’Connor, has raised $580 million (€522 million) of debt for key Chilean wind and solar projects under the company’s biggest financing deal.

The company said on Tuesday that six banks – CaixaBank, DNB, KfW IPEX-Bank, Natixis, SMBC and Société Générale – provided the debt financing to Mainstream to build 571MW of wind and solar farms. Construction on the plants has already begun and the assets are scheduled to start delivering power in 2021.

They will generate enough sustainable electricity to power 680,000 Chilean homes and will displace 656,000 metric tonnes of CO2 each year, according to the company.

The projects are part of a wider 1,300MW Chilean platform that Mainstream is planning, after the company won contracts in 2016 benefiting from power purchase agreements from the Latin American country’s government.

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Mainstream expects to reach financing deals on the final two phases of the platform “in the coming months”, it said.

Equity partner

It was originally envisaged that Mainstream would need to take on an equity partner to deliver the massive projects. However, this has been averted as the company was able to use some of the proceeds from the sale last year of a Scottish offshore wind farm development in a €650 million deal.

"Breaking ground at Mainstream's 1.3GW Andes Renovables platform is a major milestone in our long-term commitment to bringing low-cost, clean energy generation to Chile," said chief executive Andy Kinsella.

Mr O'Connor, now Mainstream's chairman, saw his stake rise to 55 per cent from 42 per cent late last year as the company bought back and cancelled shares belonging to two major legacy investors in the business, UK banking giant Barclays and Japanese trading house Marubeni.

Mainstream set up a temporary grey market last December to give long-standing investors, including Irish high-net-worth individuals and company staff, a first chance to trade stock since the venture was established in 2008.

Some 10 per cent of shares in the company changed hands in the grey market at €9 each, representing a 300 per cent return on money originally put into the company. The benefits of the Chilean platform financing will be reflected in the share price when another temporary grey market opens next year.

Mr Kinsella said last year he expected the company would more likely be sold as soon as 2020 rather than go through an initial public offering (IPO).