The impressive 60MW plant is situated in sunny southern Honduras and covers an area equivalent to around 100 football pitches. Its annual production of approximately 100 gigawatt hours (GWh) is sufficient to meet the energy needs of 80,000 households.
Scatec Solar managed each stage of the Agua Fria project, from development and construction to completion (in July 2015). Post-completion, it has taken on operational responsibility for the plant. Agua Fria represents a major step towards achievement of the Honduran government’s 300 MW target for national solar energy production capacity. The plant is a joint venture between the Norwegian Investment Fund for Developing Countries (Norfund), the Norwegian insurance company KLP, Scatec Solar and PEMSA, a Honduran company.
“Our integrated approach allows us to invest in attractive projects which would otherwise be unviable, and ensures operational foreseeability and stability. Moreover, as a result of the steady decline in the cost of renewable technologies, more developing countries are considering renewable energy as a means of meeting growing energy needs,” says Scatec Solar CFO Mikkel Tørud.
While Agua Fria is Scatec Solar’s first solar plant in Latin America, the company has several additional projects in development in the region.
“The completion of Agua Fria is an important milestone and marks our first investment in the promising Latin American market,” says Tørud.
In October 2015, Scatec Solar and Norfund signed a share purchase agreement to acquire the 53 MW Los Prados solar project in Honduras. The project have secured 20-year Power Purchase Agreement (PPA) with Empresa Nacional de Energía Eléctrica (ENEE), the government-owned utility. Tørud also relates that Scatec Solar has two further projects totalling 78 MW in development in Brazil, with construction expected to begin in the first quarter of 2017.
The completion of Agua Fria is an important milestone
Mikkel Tørud, Scatec Solar
Some 82 per cent of the 1,050 workers involved in the construction of Agua Fria came from the local community, and just under 300 workers achieved formal certification. Moreover, several women were recruited to technical and administrative positions. In total, the project entailed the investment of USD 410,000 in local schools, infrastructure and medical equipment for local hospitals.
The electricity generated by the Agua Fria plant will be purchased by the Honduran national electricity company (ENEE) under 20-year contracts. Export Credit Norway has provided USD 51,3 million in project financing. The loan, which has a maturity of 12 years, is underwritten by GIEK. Export Credit Norway and GIEK are also involved in the financing arrangements for Scatec Solar’s plant in Los Prados.