Glenfarne Group has secured up to $700 million in capital for its subsidiary, EnfraGen, to fund new investments in the Americas. EnfraGen focuses on the development, acquisition and operation of high-value, long-lived power and power infrastructure assets in the Americas.
The new financings will fund the growth of two EnfraGen subsidiaries, Prime Energía SpA and Fontus Hydro. Prime Energía will use the proceeds to fund the construction of backup power plants in Chile and refinance existing debt. Fontus Hydro will use the proceeds to acquire three run-of-river hydroelectric power plants in Panama. With these new investments, EnfraGen’s consolidated portfolio of operational and construction assets across its subsidiaries will total approximately 750 megawatts of capacity in the Americas.
The new financings are to be provided by a syndicate of banks led by Sumitomo Mitsui Banking Corp. (SMBC) and Natixis, and by funds managed by affiliates of Apollo Global Management. SMBC and Natixis are acting as mandated lead arrangers and bookrunners for a $400 million syndicated senior secured loan to Prime Energía, with additional lenders expected to join the bank syndicate in the coming weeks. The Apollo funds are providing EnfraGen with capital of up to $300 million to fund current operational and construction assets and future expansions.
Prime Energía will use the proceeds to construct five new backup power generation plants across Chile and to refinance its existing senior debt. The construction will provide over 500 skilled engineering and construction jobs across multiple regions in Chile. These new power plants will support the growth and adoption of renewable energy onto the Chilean electrical grid by providing backup power that addresses the intermittent generation of renewables and transmission system outages that cause supply/demand imbalances, ensuring stability of the grid. Based on Prime Energía’s market research, an expansion of renewables capacity requires a nearly equal expansion of backup capacity to support the grid’s addition of renewable power sources.
These long-lived, low-risk assets, once complete, will increase Prime Energía’s current capacity to 698 megawatts. Prime Energía currently owns and operates three backup power plants and one solar PV plant in Chile.
The transaction represents the first acquisition for Fontus Hydro, whose core business is to own and operate run-of-river hydroelectric power plants. The acquisition includes three operating power plants in the province of Chiriquí that are supported by contracted revenues. The facilities are also able to sell power into the Regional Electricity Market, which comprises six countries in Central America that share cross-border energy generation, contributing to a stable and efficient grid that optimizes energy resources.
