5 November 2020

Jacinta Solar Farm


  • The Uruguayan government planned to diversify its energy mix, reducing its heavy reliance on hydropower1 and imported fossil fuels during drought seasons
  • To achieve its goal, the government launched a 200MW solar PV program awarding power purchase agreements (PPAs) via UTE, the state-owned public utility of Uruguay
  • The Jacinta solar farm came online in 2015 and added 50MW of installed capacity to the Uruguayan power grid


  • After acquiring La Jacinta Solar Farm from Fotowatio Renewable Ventures in 2017, Invenergy sought to repay the outstanding construction debt on the project
  • However, the capital markets in Uruguay had traditionally been unable to provide loans with long tenors that met the needs of long-term infrastructure projects because of a lack of sufficient debt capacity
  • Thus, Invenergy turned to foreign capital markets to re-finance existing debt on the La Jacinta Solar Farm


  • Fotowatio had financed the project with an A/B loan2, which entailed IDB Invest (private sector arm of the Inter-American Development Bank) providing an A loan alongside a B Loan supplemented by the Canadian Climate Fund (C2F) for the construction of the project
  • In 2017, Invenergy re-financed the loan with an A- bond (to be undertaken by IDB Invest), and an issuance of a B-bond3, which was sold to a special purpose vehicle and then privately placed in the US market to institutional investors, with IDB Invest purchasing 5% of the B-Bond
  • The proceeds of the B-bond were then used to repay the original A and B Loans in their entirety

Stakeholders Involved

  • Administración Nacional de Usinas y Transmisiones Eléctricas (UTE) – State-owned utility, project owner and off- taker
  • Fotowatio Renewable Ventures BV (FRV) – Original project developer
  • IDB Invest – Private sector institution of the Inter-American Development Bank (IDB), provided A/B loans
  • Canada Climate Fund (C2F) and DNB – Provision of loans
  • Invenergy – Acquired project from FRV


  • The bond issuance raised c. USD 67.75M, enabling La Jacinta Solar Farm to continue providing 50MW of installed capacity to the Uruguayan energy mix
  • The A/B structure allowed loan tenors to extend beyond what commercial banks typically provided – the 25-year bond is one of the longest tenors for a project bond in Latin America
  • The project bond received an investment-grade rating (Baa3) as well as a green bond (GB) certification and assessment of GB2 (Very Good) from Moody’s

Key lessons learnt

  • Participation by development institutions, such as IDB Invest, through the A/B parri-passu1 bond structure provides assurances2 to potential investors, increasing the attractiveness of investment and generating appetite for the bond issuance
  • The B-bond structure was made possible as the La Jacinta project earned its revenues via a dollar- denominated, 25 year agreement with Uruguay's state-owned utility company
  • However, the A/B bond structure may offer limited replicability because it requires the offtaker (the Uruguayan government) to bear significant long-term fiscal risk, which provided a 25 year take-or-pay PPA through UTE