Innergex Achieves Financial Close On Its San Andrés Battery Energy Storage Project in Chile
- A CAN$66.7 million non-recourse bridge loan closed for Innergex’s second utility-scale storage project under construction in Chile
- Upon its commissioning, the facility will benefit from capacity payments to ensure stable and predictable revenues to which will be added revenues derived from the merchant market
LONGUEUIL, Quebec, April 21, 2023 – Innergex Renewable Energy Inc. (TSX: INE) (“Innergex” or the “Corporation”) is proud to announce the closing of a US$49.5 million (CAN$66.7 million) non-recourse construction financing with SMBC for the San Andrés battery energy storage project, with 35 MW/175 MWh (5 hours) of storage capacity located on the site of Innergex’s existing San Andrés solar facility in the Atacama desert in Northern Chile.
The San Andrés battery project is Innergex’s second utility-scale project under construction in Chile, in addition to the 50 MW/250 MWh (5 hours) Salvador battery project. Both projects are scheduled to be commissioned in 2023.
“With both the San Andrés and Salvador battery projects advancing construction, we expect to add a total of 425 MWh of storage to our assets in Chile by the end of the year,” said Michel Letellier, President and Chief Executive Officer of Innergex. “We are very proud of our growing storage portfolio as we believe energy storage is an essential complement to renewable energy. These projects will allow Innergex to take advantage of excess production and optimize revenues based on market dynamics and demand in Chile. Innergex is committed to the development of storage facilities across our different markets, either in addition to existing assets to add more flexibility and reliability or as stand-alone facilities to ensure grid resiliency.”
The San Andrés battery project will feature Mitsubishi Power’s Emerald Storage Solution and will be located on the site of the 50.6 MW San Andrés solar facility. It will dispatch the renewable energy produced by the solar facility and stored during the day to evening hours to benefit from peak prices and avoid daytime congestion. Work on-site commenced in February 2023 and is progressing well with the required permits in place.
The total construction costs of the San Andrés battery project are estimated at US$61.9 million (CAN$83.4 million) and will be mainly financed with a US$49.5 million (CAN$66.7 million) 2-year non-recourse bridge loan. The construction bridge loan is expected to be repaid with the proceeds from a future long-term non-recourse financing after the facility reaches commercial operation. The remaining US$12.4 million (CAN$16.7 million) will be financed from Innergex’s revolving credit facilities.
The project will benefit from capacity payments, which represent an important component of the battery energy storage system overall revenue stream. Chile has recently approved new legislation on energy storage and electromobility that promotes and recognizes the valuable contribution of energy storage projects to grid reliability.
In addition to the stable and predictable revenues generated through capacity payments, the project will dispatch and sell the stored renewable energy on the merchant market at times of greater demand, enabling the facility to support the grid upon energy peak demand and optimize the project’s returns.
The San Andrés battery storage facility is expected to generate annual revenues of approximately US$8.0 million (CAN$10.8 million) in its first full year of operation, while operating, general and administrative expenses are expected to reach US$0.4 million (CAN$0.5 million) during the same period.
About Innergex Renewable Energy Inc.
For over 30 years, Innergex has believed in a world where abundant renewable energy promotes healthier communities and creates shared prosperity. As an independent renewable power producer which develops, acquires, owns and operates hydroelectric facilities, wind farms, solar farms and energy storage facilities, Innergex is convinced that generating power from renewable sources will lead the way to a better world. Innergex conducts operations in Canada, the United States, France and Chile and manages a large portfolio of high-quality assets currently consisting of interests in 87 operating facilities with an aggregate net installed capacity of 3,694 MW (gross 4,244 MW) and an energy storage capacity of 159 MWh, including 40 hydroelectric facilities, 35 wind facilities, 11 solar facilities and 1 battery energy storage facility. Innergex also holds interests in 11 projects under development with a net installed capacity of 696 MW (gross 733 MW) and an energy storage capacity of 605 MWh, 5 of which are under construction, as well as prospective projects at different stages of development with an aggregate gross installed capacity totaling 8,701 MW. Its approach to building shareholder value is to generate sustainable cash flows, provide an attractive risk-adjusted return on invested capital and to distribute a stable dividend.
Cautionary Statement Regarding Forward-Looking Information
To inform readers of the Corporation’s future prospects, this press release contains forward-looking information within the meaning of applicable securities laws (“Forward-Looking Information”), including the Corporation’s power production, successful construction and financing of the San Andrés Battery Project, sources and impact of funding, execution of non-recourse project-level financing (including the timing and amount thereof), business strategy, and other statements that are not historical facts. Forward-Looking Information can generally be identified by the use of words such as “approximately”, “may”, “will”, “could”, “believes”, “expects”, “intends”, “should”, “would”, “plans”, “potential”, “project”, “anticipates”, “estimates”, “scheduled” or “forecasts”, or other comparable terms that state that certain events will or will not occur. It represents the projections and expectations of the Corporation relating to future events or results as of the date of this press release.
Forward-Looking Information includes future-oriented financial information or financial outlook within the meaning of securities laws, including information regarding the Corporation’s targeted production, the estimated targeted revenues, the estimated project costs and schedule, including start of commercial operation for the San Andrés Battery Project, and other statements that are not historical facts. Such information is intended to inform readers of the potential financial impact of expected results, of the expected commissioning of the San Andrés and Salvador Battery Projects, and of the potential financial impact of the San Andrés Battery Project. Such information may not be appropriate for other purposes.
Forward-Looking Information is based on certain key assumptions made by the Corporation, including, without restriction, those concerning hydrology, wind regimes and solar irradiation; performance of operating facilities, acquisitions and commissioned projects; project performance; availability of capital resources and timely performance by third parties of contractual obligations; favourable market conditions for share issuance to support growth financing; favourable economic and financial market conditions; the Corporation’s success in developing and constructing new facilities; successful renewal of PPAs; sufficient human resources to deliver service and execute the capital plan; no significant event occurring outside the ordinary course of business such as a natural disaster, pandemic or other calamity; continued maintenance of information technology infrastructure and no material breach of cybersecurity. Please refer to Section 5 – OUTLOOK | Strategic Plan 2020-2025 of the 2022 Annual Report regarding the assumptions used with respect to the 2025 growth targets.
For more information on the risks and uncertainties that may cause actual results or performance to be materially different from those expressed, implied or presented by the forward-looking information or on the principal assumptions used to derive this information, please refer to the “Forward-Looking Information” section of the Management’s Discussion and Analysis for the three- and twelve-month periods ended December 31, 2022.
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