Polaris Infrastructure has completed the acquisition of 100% shares in Union Energy Group (UEG), which owns 242MW hydroprojects in Peru.
Polaris Infrastructure is a Canada-based company focused on operating, acquiring and developing renewable energy projects in Latin America.
As part of the deal, Polaris Infrastructure has acquired the 5MW Canchayllo project, in operation since 2015; Generación Andina, two projects in late stages of construction with 28MW of generating capacity; Karpa, a single 20MW project with a power purchase agreement (PPA) in place; and the portfolio of early stage development projects totaling 189MW.
Polaris Infrastructure CEO Marc Murnaghan said: “We are very pleased to have completed this transaction, which we expect will provide numerous benefits to the Company and its shareholders. Namely, the acquisition provides significant diversification of both asset class, by adding run-of-river hydro projects, and geography, by entering Peru.
Canchayllo is a run-of-river hydro project that holds a US dollar-denominated PPA with the Peruvian Ministry of Energy and Mines (MEM) that is effective until 31 December 2034.
Generación Andina includes El Carmen and 8 de Agosto projects, which are two run-of-river hydro projects in the Huanuco region of Peru that are in late stages of construction.
Through a 60km transmission line, the two projects will be connected to the national grid. Polaris Infrastructure will carry out the completion of the transmission line.
Murnaghan said: “The Company expects to continue to grow its cash flow per share and leverage available cash resources on the balance sheet to fund capital requirements of the Generación Andina projects currently under construction.
“The combination of projects in operation and under construction, with long term PPAs in place, and a portfolio of early stage development projects, is very attractive.”
Located in the Huanuco region of Peru, the Karpa project has a US dollar denominated PPA with MEM.
Construction has not yet started on the Karpa project and the Polaris Infrastructure intends to make a preliminary assessment with respect to the project in the first quarter of 2019.