Canadian Solar Inc. announced today the financial close of its 126 MWp Tastiota project in the state of Sonora, Mexico. The non-recourse financing package, arranged by Canadian Solar, was provided by Sumitomo Mitsui Banking Corporation ("SMBC"). SMBC acted as Sole Structuring Bank and Mandated Lead Arranger in the transaction.
The Tastiota financing package consists of a US$67 million senior loan, US$15 million letter of credit facility, and a US$12 million VAT facility covering the construction and operational phase of the project.
Following the sale in November 2019 of the 49% interest in a 370 MWp portfolio of Mexican projects to Korea Electric Power Corporation ("KEPCO"), South Korea's largest electric utility, and Sprott Korea ("Sprott"), a leading fund manager, these parties have entered into an agreement to acquire Canadian Solar's remaining interest in the projects following their commercial operation date.
The Tastiota project was awarded a Power Purchase Agreement (PPA) during Mexico's third energy auction. Electricity generated by the project will be sold to the Federal Electricity Commission (CFE), under a 15-year PPA for energy and capacity, and 20-year for Clean Energy Certificates. The 126 MWp solar power plant will utilize high efficiency BiHiKu modules supplied by Canadian Solar and is expected to begin operations at the end of 2020.
Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, commented, "We are very pleased to partner with SMBC to support Mexico's green strategy and renewable energy goals. We are also delighted to collaborate with our global partners KEPCO and Sprott to advance this project. The closing of this non-recourse project finance during these extraordinary times is a strong sign of financial markets' confidence in Canadian Solar's vision and ability to deliver clean solar energy in Mexico and Latin America more broadly. I am proud of our teams' accomplishments in contracting 436 MWp of PPAs in Mexico, which is part of a broader 2.9 GWp portfolio of project backlog across Latin America. We remain focused on serving this market and maintaining our valued relationships with energy regulators, investors, customers, suppliers and business counterparties, as well as supporting continued job creation across the renewable energy sector."