InterEnergy commits to invest million in equity and assist in additional fundraising for the development of renewable energy projects in Latin America and the Caribbean over a two year period. The first project will be the construction of a 215MW wind generation project in Cocle, Panama, led by partner Union Eolico Panamena (UEP). The project is expected to be the largest wind power producer in the Central America and Caribbean regions. This is the second stage of Panama's UEP-led wind power expansion, intended to diversify Panama's energy sources, reduce reliance on fossil fuels and hydroelectric power, and lower the price of energy.
InterEnergy will provide in direct equity investment to the project, and provide expert assistance in raising an additional needed to complete the wind farm. InterEnergy will be responsible for generating the materials needed to sell the project to private equity institutions and corporate and development banks, and will lead meetings that take place throughout the process. Additionally, as construction in Cocle begins, InterEnergy will provide guidance based on previous experiences in the Caribbean region. As part of this, InterEnergy will participate in negotiations with vendors, definition of timelines, and the commencement of the wind farm operations in the second half of 2015. Additional community benefits are also planned, including the establishment of a nutritional center to serve approximately 1,200 children in the area.
During the last quarter of 2015, InterEnergy will look to participate in additional renewable energy generation projects in Latin America and the Caribbean.
As part of this commitment, InterEnergy will follow the subsequent phases:
Phase 1: Participation in Union Eolica Panamena's Wind Farm project (UEP2) in Panama. During this process, InterEnergy will:
1) Conduct meetings with private institutional and regional investors, as well as multilateral financing organizations to raise the additional funds required to complete the construction of the UEP2. (January 2014 through project completion)
2) Complete UEP2; which includes raising capital for equity investment and closing financing solutions with banks for loans with economically feasible terms. (Approximately March 2014 through June 2015)
3) Construction and deployment of UEP2, which will include the construction of eighty-six 2.5MW wind turbines that will be operational and generating power for the Panamanian energy grid. (Approximately March 2014 through June 2015)
Phase 2: In the second half of 2015, InterEnergy will begin to seriously pursue other potential projects to mimic the model in other Latin American and Caribbean countries, potentially through different renewable technologies (solar photovoltaics, biomass, etc). (June 2015 through December 2015)
Latin America and the Caribbean have some of the best conditions in the world for renewable energy generation from wind and solar photovoltaics. However, much of the region relies upon a combination of costly fossil fuels and hydraulic generation that is susceptible to droughts and often disrupts ecosystems. Panama, in particular, receives a very large proportion of its power from hydroelectric sources: 61% of its installed capacity of 2,341 MW for 2013, according to Centro Nacional de Despacho (CND). Due to droughts in recent years, the country has been forced to cope with a severe energy crisis, disrupting daily life and economic production for all Panamanians, even requiring the government to enforce strict rules on air conditioning use and curfews on all government and economic activities during specific periods.
In 2014, Union Eolica Panamena (UEP) started the diversification of power sources in Panama with a first phase that added 55MW of on-shore wind power. This was one of the largest wind farms in the region, and with the help of InterEnergy, Phase 2 plans to add an additional 215MW of generation - the largest in Central America and the Caribbean. Since the price of wind and solar energy has reduced dramatically over the past decade, the project should yield above market-rate returns for InterEnergy and other investors, while increasing energy security and reducing local smog and greenhouse gas emissions.