MPC Energy Solutions starts work on El Salvador solar plants
MPC Energy Solutions (MPCES) has achieved the financial close of its Santa Rosa & Villa Sol solar PV plants in El Salvador, which have a combined capacity of 21.07MW, and will start construction work later this month.
The close with local lender Banco Agrícola, a subsidiary of Bancolombia, also marks the successful conclusion of the engineering phase, and Enerland Group, the Spanish multinational EPC company, will now get to work building the project, following a "minor delay" caused by a change of contractor. Energy production is expected to start in Q4 2022.
The plants will generate around 43GWh a year and MPCES expects an annual revenue contribution from this project of around US$3.5 million. The project's solar power will offer substantial environmental benefits, avoiding nearly 11,000 tons of CO2 emissions per year.
Once commissioned, the solar plants will sell all their generated energy through a 20-year USD-denominated power purchase agreement (PPA) with CAESS, the local subsidiary of US-based energy company AES. The total investment to reach COD is US$25.3 million, of which 75% is financed through a 15-year project financing facility.
As part of MPCES's ongoing commitment to ESG measures, the firm has set a minimum target of 10% for the participation of women in the construction workforce.
Martin Vogt, CEO of MPC Energy Solutions, said the Government of El Salvador considers the energy sector a strong contributor to economic and social development.
"The diversification of the energy mix towards clean energy sources has been prioritised," he said. "This draws up a long-term energy strategy for the country and shows the high potential of the renewable energy market."
El Salvador has a long history of renewable energy, primarily biomass, hydropower, geothermal and recently solar PV. The deployment of renewable energy technologies reached approximately 1.6 GW in 2021, providing about 30-40% of the national energy supply.
National energy demand grew by 6% per annum in the past five years and is still met mainly by oil fuelled thermal power. The electricity market is liberalised and unbundled with the majority of power plants owned and operated by private IPPs. The government has adopted the Paris Agreement and is currently revising its Nationally Determined Contributions (NDC) to be in compliance with its commitment to the 1.5°C global goal.
Energía del Pacífico is another key project which will provide clean energy for El Salvador.
Located in the Municipality of Acajutla, Sonsonate, the 378MW project is an LNG-to-power facility that will supply approximately 30% of the country's energy demand and contribute to the diversification of its energy mix and reduced reliance on heavy fuel oil and imported diesel.