Polaris buying solar assets in Panama, hydro in Ecuador

Canadian renewables company Polaris Infrastructure Inc (TSE:PIF) announced today the closing of two solar purchases in Panama and the signing of a deal to acquire an operational run-of-the-river hydropower plant (HPP) in Ecuador.

Polaris has completed the acquisition of two solar projects with a combined capacity of 13.4 MW in direct current (DC), located in Panama's Cocle Province. The price it paid for all shares, licences and permits amounts to USD 600,000 (EUR 540,000) and the company estimates it will need to invest a total of USD 10 million to realise the projects within nine to ten months.

The Canadian firm noted that the solar projects will be able to sell electricity on the spot market, but it will also consider securing long-term contracts prior to achieving commercial operation.

That particular deal has also provided Polaris with exclusive development rights for two additional solar development stage projects totalling 26 MW DC.

As per the hydro asset, Polaris has agreed to purchase a 6.3-MW HPP along the Cubi River in San Jose de Minas, Ecuador, at a total equity value of USD 20.4 million. At closing, the buyer will assume some USD 7 million in debt.

The plant has been operating since June 2020 under a 50-year concession and a 15-year power purchase agreement (PPA) with the government entity Agencia de Regulacion Control de Energia y Recursos (ARCENNR). The PPA has seven years remaining at a price of USD 78.10 per MWh.

Polaris noted that an additional turbine could be added to the HPP in order to raise its capacity to 10 MW. The company also has sealed a development framework deal with the seller to jointly pursue further hydro projects in Ecuador.

“The addition of a hydro project in Ecuador and a solar project in Panama, provides further diversification both operationally and geographically. In addition, both opportunities are expected to be the first entry points in jurisdictions within which Polaris wants to grow and develop further projects," said CEO Marc Murnaghan.

(USD 1.0 = EUR 0.902)

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