Pirapora Solar Park

active

Pirapora Solar Holding S.A., a partnership of the Spanish company Solatio Brasil Gestao de Projetos Solares Ltda (80%) and the Canadian company Canadian Solar UK Projects LTD (20%), was granted the authorization to build five solar power plants located in the state of Minas Gerais, municipality of Pirapora (150 MW in total capacity). The 35-year contracts were signed with the regulatory agency ANEEL starting in March 2016. The following special purpose companies were created to manage the power plants: Pirapora 5 (30 MW) - Pirapora V Energias Renovaveis S.A. Pirapora 6 (30 MW) - Pirapora VI Energias Renovaveis S.A. Pirapora 7 (30 MW) - Pirapora VII Energias Renovaveis S.A. Pirapora 9 (30 MW) - Pirapora IX Energias Renovaveis S.A. Pirapora 10 (30 MW) - Pirapora X Energias Renovaveis S.A. The total investment was estimated at US$ 503.5 million (BRL 1.6 billion). Financial closure was achieved in May 2017, when the sponsor was granted a US$ 166.5 million (BRL 529.03 million) loan from the Brazilian bank BNDES. Construction works commenced in October 2016 and were expected to be concluded by August 2017. The government periodically runs public bidding for the sale of energy to the country´s distribution companies. Pirapora Solar Holding won the public bidding that took place in August 2015. The average tariff of the auction was US$ 89.5/MWh (BRL 298.58/MWh). In October 2016, Solatio sold 100% of its shares in the project to the French company EDF EN do Brasil Participaçoes Ltda. The sponsors were granted the right to take part in the government program called Regime Especial de Incentivos para o Desenvolvimento da Infra-Estrutura (Reidi). Companies selected to take part in this program were given tax cuts in the acquisition of capital equipment and construction material acquired both in the domestic and international markets (this incentive represented a cost reduction of about 9.25%). In addition, the company was allowed to use accelerated depreciation methods of accounting for construction expenditures.