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Chile‘s Generadora Metropolitana closes US$987 million debt package
Proceeds to help fund 480MW PV facility and convert diesel-fired power plant into one using natural gas
Michael Marray 27 Oct 2021

Chilean energy company GM Holdings (Generadora Metropolitana) has closed a US$987 million financing package to help fund a 480-megawatt solar photovoltaic facility and convert an existing diesel-fired power plant into one using natural gas. The financing was structured with a combination of bank debt and a private bond offering.

Participating institutions were Banco de Credito e Inversiones (Miami branch), Credit Agricole Corporate and Investment Bank (CA CIB), DNB Bank, ING Capital, MUFG Bank, and Sumitomo Mitsui Banking Corporation. CA CIB acted as financial adviser, note rating adviser, sole global note coordinator, hedge adviser and coordinator, coordinated lead arranger and hedge provider.

Garrigues acted as local counsel to the participating banks, in conjunction with Milbank as international counsel. Generadora Metropolitana was advised by Larrain y Asociados, in conjunction with Latham & Watkins.

Generadora Metropolitana is the fifth largest generator by capacity in Chile, and is jointly owned by EDF of France and independent Chilean power company AME.

According to CA CIB, the financing used an innovative project finance structure with strong credit metrics, combining a monetization of cash flows from Generadora Metropolitana’s existing assets and contracts with a construction financing. It says the bond offering received strong interest from banks and institutional investors, and was oversubscribed. The financing is so far the largest non-recourse transaction in Chile this year.

Generadora Metropolitana supplies electricity to regulated users of 23 distribution companies in the amount of up to 4,000 gigawatt-hours per annum, which equates to 8% of the Chile's regulated electricity market.

Proceeds of the financing will go towards refinancing the company's existing debt, funding the construction of a 480 megawatt-peak (MWp) photovoltaic plant, the largest in the country, and to convert the 132MW Los Vientos diesel-fired plant to natural gas. The CEME1 solar photovoltaic project is located in the Antofagasta Region, while the Los Vientos power plant is in the Valparaiso Region.

Once the projects are completed, the company will have a total of 1,226MW of installed capacity. The resulting electricity generation mix jibes with Chile's efforts to transition towards more renewables while simultaneously replacing its coal generation with other baseload technologies such as natural gas.

This is the third transaction that CA CIB advised and closed this year in Chile. Previous closings included the 204MW Cabo Leones II wind farm, owned by Spanish power producers Grupo Ibereolica and Global Power Generation, and the 101 San Pedro PV plant, owned 100% by Global Power Generation.  

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