December 14, 2020
Clifford Chance advises on green refinancing of solar plants in Uruguay
Clifford Chance advised Solaria Energía y Medio Ambiente S.A (Solaria) in connection with the approximately US$29 million B-Bond refinancing of the Natelu and Yarnel solar plants in Uruguay. Solaria partnered with IDB Invest and other institutional investors – through the sale of senior Green notes, rated "BBB" with a stable outlook by S&P. The proceeds of the B-Bond will be used to refinance the Natelu and Yarnel operating solar photovoltaic plants located in Uruguay.
Each project has a long-term power purchase agreement with Uruguay's state-owned company Administración Nacional de Usinas y Trasmisiones Eléctricas (UTE). The Natelu and Yarnel solar plants have a combined generation capacity of approximately 23 MW. The notes were labeled as green by S&P and the transaction achieved an overall score of 80 out of 100, equivalent to a Green Evaluation score of E1, the highest score on S&P scale of E1 to E4. The overall score is a reflection of the transaction strong cash management covenants, robust governance framework, and transparent reporting mechanisms, as well the projects' contribution toward systemic decarbonization.
This transaction is the third B-Bond refinancing handled by the Firm in Uruguay. The B-Bond structure has two components: (i) a bank financing provided by IDB Invest and (ii) a B-Bond private placement pursuant to Section 4(a)(2) and Regulation D under the US Securities Act of 1933.
"The B-Bond structure has contributed to the significant growth of institutional investors' participation in Latin America over the last few years. The B-Bond structure gives institutional investors the same protections and tax benefits that are available to IDB Invest in any member state, leading to the popularity of this structure and overall success," said lead deal associate Luis Maria Clouet.
Capital Markets partner Hugo Triaca added, "we are thrilled to have participated in another green finance transaction in Latin America. The B-Bond structure is an efficient alternative for certain companies looking to finance or refinance renewable energy projects in Uruguay and the region."
Triaca and Clouet comprised the firm's team and are both based in New York.