Sun | May 22, 2022

Soleco Energy secures US$24m in financing

Published:Wednesday | January 26, 2022 | 12:07 AM
Angella Rainford, founder of Soleco Energy Limited.
Angella Rainford, founder of Soleco Energy Limited.

Soleco Energy Limited has secured US$24.3 million in funding from IDB Invest, to fast-track its projects that are mainly focused on solar energy systems.

“This loan facility will enable Soleco to provide competitive financing options to our clients in Jamaica,” said Angella Rainford, the founder of Soleco.

The IDB Invest funding was approved December 31, 2021. It’s split US$10.99 million as a syndicated loan and an additional US$13.33 million in financing to Soleco.

The renewable energy company, which provides energy systems to commercial operations, will use the funds raised initially for its project at Caribbean Broilers Group, and then other projects in Jamaica and overseas, Rainford said.

The main power plant being developed at the Caribbean Broilers complex at Hill Run, St Catherine, is being done by a separate company, New Fortress Energy, and will run on natural gas, but Soleco will also build mini plants for the poultry company’s network at other sites, she said.

Created in 2019, Soleco is a special purpose vehicle used to finance the construction of energy projects in the region on behalf of its clients, utilising a ‘lease to own’ business model. The clients lease the plant and buy back the asset over a period.

ACCESS TO FUNDING

Soleco’s principals were co-developers of the 51MW Paradise Park project in Westmoreland, Jamaica, which is the largest solar plant in the English-speaking Caribbean. Soleco itself has a presence in Jamaica, Barbados, and the Bahamas.

“We aim to help our clients reduce their energy costs. One of the main hurdles to installing solar and energy storage in this market has been access to funding and IDB’s support enhances our ability to do so,” Rainford said, adding that Soleco provides 100 per cent financing to commercial and industrial customers for ‘lease-build’ clean energy systems.

The IDB Invest loan will finance the build-out of up to 26 megawatts of new distributed solar generation capacity. The portfolio will be developed over time, with an expected initial set of five installations consisting of 11.25 MW of total installed capacity distributed between two anchor clients, according to details on the project.

Rainford indicated that the total project costs are estimated at US$33.3 million. The IDB backing would therefore account for nearly three-quarters of the financing. The balance of the projects will be funded from equity.

She said the IDB financing would allow Soleco to offer flexible terms to clients, but declined to comment on the rates to be charged, citing competitive reasons.

The shareholders in Soleco are largely silent, except for Rainford and Deetken, a Canadian energy company that invests in the region.

business@gleanerjm.com