Mainstream seeks partner for $1.65bn Chilean projects

Company has Chilean government contracts to develop and run wind and solar plants

Mainstream Renewable CEO Andy Kinsella

Mainstream Renewable CEO Andy Kinsella

 

Dublin-based Mainstream Renewable Power has begun the search for an equity partner to help build and run $1.65 billion (€1.42 billion) of wind and solar plants in Chile.

The company has hired KPMG in London to seek expressions of interest for a partner in its wholly-owned 1,300-megawatt Andes Renovables Chilean platform, a spokesman for the company confirmed to The Irish Times.

The combined size of the projects, which will be mainly bank financed, equates to more than a quarter of Ireland’s peak electricity needs.

The move comes months after Mainstream, led by chief executive Andy Kinsella and where founder and main shareholder Eddie O’Connor remains chairman, sold a 450-megawatt wind farm project off the coast of Scotland to French utilities giant Electricite de France (EDF) for a price understood to be in excess of €600 million.

That deal helped Mainstream to deliver a €556.9 million gross profit for the first half of this year, allowed it to pay off all its debt and left it with €593 million of cash on its balance sheet at the end of June, the company said in a recent letter to shareholders.

Solar plants

It is understood that Mainstream is seeking to sell only a stake in the Chilean platform and is committed to building out its projects there. The company won contracts benefiting from power purchase agreements from the Chilean government two years ago to develop and run the wind and solar plants.

The platform consists of three portfolios, the first of which, amounting to 550 megawatts of mainly wind projects, is expected to come to financial close by the end of next March, when all the funding is in place. The other two are expected to reach financial close later in 2019, according to the company.

Mainstream confirmed in its recent shareholder letter that it will proceed with a grey market for its shares later this year, and that the company sees its shares as being worth up to €11.70 each, after a planned buyback of stock owned by legacy investors Barclays and Japan’s Marubeni.

Investors, including a number of Irish high-net-worth individuals, paid €3 per share in the company’s original equity raise more than a decade ago. Mr O’Connor set up the company in 2008 after the sale of Airtricity, which he founded more than two decades ago.