[China Co-financing Fund] IDB administers 9.75 million USD loan from CHC for Solem Solar Farm in Mexico

[China Co-financing Fund] IDB administers 9.75 million USD loan from CHC for Solem Solar Farm in Mexico On 7 August 2017, the Inter-American Investment Corporation (IIC, now IDB Invest), acting on behalf of the Inter-American Development Bank (IDB) Group, signed a 75 million USD loan package to finance the Solem PV project.

According to IDB Invest, 13% of this loan, 9.75 million USD, was provided by the China Co-financing Fund for Latin America and the Caribbean (CHC).

The Solem Solar Farm is a build, own, operate Public-Private Partnership (PPP) greenfield project located in the El Llano municipality of the Aguascalientes state. It consists of two adjoining solar PV plants with a combined capacity of 290MW and a 350 megawatt peak (MWp).

Cubico Alten Aguascalientes Dos, S.A.P.I. de C.V. was the special purpose vehicle (SPV) responsible for project implementation, with a 20-year contract. Project construction began in October 2017. The project reached commercial operation on October 2, 2019, per PV Tech. The project was financed via both debt and equity components, with a debt-equity ratio of 73:23.

The total project cost was 368 million USD, with the equity valuing 99.4 million USD, and non-recourse project finance debt valuing 268.8 million USD.

The equity financing is sponsored by non-Chinese companies - Cubico Sustainable Investments (for $69.6 million USD, with 70% ownership) and Alten Energias Renovables (for $29.8 /million USD, with 30% ownership).

The debt component of the project is being funded through the $75 million loan package from the IIC/IDB, a $45 million loan from the International Finance Corporation (IFC), a loan of $45 million USD from Bancomext, $45 million from Banobras, and $58.6 million from Mitsubishi UFJ Financial Group (MUFG).

The IDB group loan package consisted of, in addition to the amount from the China Co-Financing Fund, 27 million USD from the IDB (36%), 18 million USD from the IIC (24%), and 20.25 million USD from the Canadian Climate Fund for the Private Sector in the Americas.

The solar plants have energy purchase contracts, with clean energy and power certificates, that were signed with CFE Basic Supply as part of Mexico’s second Long-Term Electricity Tender in September 2016.

The China Co-Financing Fund was established on 14 January 2013 with a contribution of 2 billion USD by the People's Bank of China, and it is administered by the IDB. For more information, see umbrella Record ID#86526.