23 MW - Platts

Jay Gallegos, CEO
Globeleq Mesoamerica Energy
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GME was established in 2004, focus in Central and South
America and Mexico
Operation wind parks:
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23 MW operating in Costa Rica (Plantas EólicasPESRL)
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102 MW operating in Honduras (Cerro de Hula) expansion
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44 MW operating in Nicaragua (Eolo)
Projects under development:
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130 MW awarded in Costa Rica
PESRL2
40 MW –Guatemala
900MW+ under study
Plantas Eólicas, SRL, Costa Rica
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58 Kenetech turbines, 23 MW installed capacity
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Built in 1994, first utility scale wind farm in LatAm
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Kenetech (EPC Contractor & Operator) bankrupt
before C.O.
All Maintenance in-house
Commercial Operation 1996, average availability
96%
PPA with ICE (Costarican Public Utility)
Cerro de Hula, Honduras
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51 Gamesa wind turbines, 102 MW
PPA with Utility for 20 years
First wind plant in Honduras
Finance from US ExIm Bank and CABEI
Construction in 11 months (10 sites)
+300 landowners - Property entitlement and
regularization
More than 30 town hall meetings, c. 2000 Good
Neighbor Agreements
Expansion of 24 MW
Eolo Wind Plant, Nicaragua
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22 Gamesa wind turbines, 44 MW
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PPA with private utility for 20 years
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Finance from FMO (Netherlands), German
Development Bank (DEG), and Proparco
(France)
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Construction started before financial close
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Construction in 7.5 months
Wind Projects awarded in Costa Rica
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50 MW awarded under BOT scheme
• Location in Liberia, Guanacaste
• PPA with ICE for 20 years
• Expected Commercial Operation for 2015
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4 x 20 MW selected under BOO scheme
• 2 projects located in Liberia, Guanacaste
• 2 projects located in Tilarán, Guanacaste
• PPA with ICE for 20 years
• Expected Commercial Operation for 2016
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PESRL Repowering
De-risking Renewables
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Around the world, developing countries are seeking to rapidly scale-up renewable
energy investment. This shift to renewable energy is driven by a number of
considerations:
• Many developing countries are struggling to meet fast-growing energy
demand
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About 1.3 billion people still lack access to electricity and 2.7 billion to
modern energy services, with their human development held back
through energy poverty
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Meanwhile, rising global fuel prices and resource scarcities are
making developing countries increasingly vulnerable to oil prices. Over
one-third of low-income countries already pay more than 10 percent of
their gross domestic product (GDP) to secure their oil supply
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At the same time, the technology cost of renewable energy has been
experiencing remarkably steady falls over the past decades
De-risking Renewables
• The difference in financing costs (debt and equity) dramatically affect the
cost of renewable energy in developing countries
Source: UNDP
De-risking Renewables
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The higher financing costs in developing countries reflect a number of
perceived or actual informational, technical, regulatory, financial and
administrative barriers and their associated investment risks. A country needs
to provide potentially very high return rates to investors to succeed in
attracting private investments.
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For wind power development if independent power producers (IPPs) face
barriers in access to grids, lengthy and uncertain processes to issue permits,
limited local supply of expertise or a lack of long-term price guarantees.
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Rather than a problem of capital
generation, the key challenge of
funding the transition towards a low
carbon energy system is to address
existing investor risks that affect the
financing costs and competitiveness of
renewable energy in developing
countries.
Source: UNDP
Some of the building blocks take
much longer in the Region
Resource
Assessment
Operation &
Maintenance
Interconnection
Construction
Infrastructure
Financing
Land
Balance of
Plant
Environment
Equipment
Socialization –
security
Permits
Off-Taker
/ Market
Legislation &
Policies
“Before the Wedding” - Projects Take Time
1989
1990 1991 1992 1993 1994 1995 1996
Plantas Eólicas, Costa Rica (23 MW)
C/O
MOVASA, Costa Rica (20 MW)
AeroEnergía, Costa Rica (8 MW)
Tejona, Costa Rica (20 MW)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
C/O
C/O
C/O
Amayo, Nicaragua (40 MW)
C/O
PEG, Costa Rica (50 MW)
II (23 MW)
C/O
C/O
Cerro de Hula, Honduras (102 MW)
C/O CdH II
Coopesantos, Costa Rica (13 MW)
C/O
Chiripa, Costa Rica (50 MW)
San Buenaventura, Costa Rica
Valle Central, Costa Rica (12 MW)
C/O
Eolo, Nicaragua (44 MW)
C/O
Blue Power, Nicaragua
C/O
Las Sierras, Nicaragua
Santa Fé, Panama
Toabre, Panama
El Tesoro, Panama
Penonome, Panama
Buenos Aires, Guatemala
> 10 MW wind projects
San Antonio, Guatemala
Piedras Blancas, Guatemala
2014
“After the Wedding” Examples
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Honduras – Dealing with post COD Legal
Adjustments
• Changes in distribution taxes directly must be dealt
with through new legislation, evocation of Change in
Law provisions in PPA or reduced project returns.
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Costa Rica -.Managing Tariff uncertainty
• Latent regulator ability to adjust tariff creates
issues in financing and valuation.
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Nicaragua – Offtaker risk and uncertainty
• Changes in offtaker ownership structure
• Dealing with offtakers running losses
How to promote renewable energy
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Key steps:
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Clear renewable targets set (requiring Bids or feed-in tariffs for long
term PPAs (Power Purchase Agreements)
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Streamlined & clear permitting process (Single Window)
State backed payment guarantees
Government needs to follow up on investment to help with
implementation of incentives, issues that arise (VAT, Customs,
Indigenous Groups, Changes in Law, Problems with Regulators,
posting of Payment Guarantees, etc.)
Thank you!
www.GlobeleqMesoamericaEnergy.com
Tel: +506 2228-9300