Recurrent Energy, a global developer of solar and energy storage assets, has received 490 million Brazilian reais (about US$100 million) in non-recourse project financing for its Ciranda Solar Power Cluster in Brazil.
The 300 MW Ciranda Cluster, which reached completion in August 2023, stands as a testament to Recurrent Energy’s commitment as the long-term owner and operator.
This financial milestone was achieved through two strategic avenues: Ciranda Phase I raised 285 million reais through a private placement bond with investment funds managed by Vinci Partners, an alternative investment platform in Brazil.
Simultaneously, Ciranda Phase II secured a 205 million reais facility with Banco Nacional de Desenvolvimento Econômico e Social (BNDES), a prominent state-owned development bank in Brazil.
The unique aspect of both financings lies in their inflation-indexed structure to the National Consumer Price Index (IPCA). This innovative approach aligns the cost of debt with the inflation-indexed operating cash flows of the projects, showcasing a forward-thinking financial strategy.
Ismael Guerrero, CEO of Recurrent Energy, highlighted Brazil’s stature as the largest renewable energy market in Latin America, emphasizing the significance of BNDES’s and Vinci’s involvement in funding Recurrent Energy’s solar portfolio. Guerrero views this as a vote of confidence in their leadership within Brazil’s renewable energy sector.
The Ciranda Cluster, powered by Canadian Solar’s BiHiKu modules, operates at full capacity. Both Ciranda Phase I and Ciranda Phase II projects secured a 15-year, inflation-adjusted Power Purchase Agreement (PPA) through a private auction organized by COPEL Energia, a prominent player in Brazil’s energy trading landscape.
Recurrent Energy’s accomplishment in securing substantial financing reinforces the momentum of renewable energy development in Brazil and underlines the attractiveness of innovative financing structures for sustainable energy projects.