A subsidiary of Japan-based Sojitz Corporation has announced plans to invest in the first utility-scale solar power project in Peru.
Sojitz Corporation of America has signed an agreement with Grupo T-Solar Global, S.A. to invest in two solar power projects in Peru. Sojitz will take up a 49% equity stake in the two power plants.
The Majes and Reparticion Solar Power Plants are to be located in the southern part of the country, which receives significant solar radiation, and have a combined installed capacity of over 44 MW. When these power projects began commercial operation in July 2012 they were among the first utility-scale solar power plants in Peru. The projects feed electricity to the country’s national grid under a 20-year power purchase agreement with tariff guaranteed by the Ministry of Energy and Mines.
Last year, the government increased its renewable energy target to 60% by 2025. Currently, Peru’s electricity mix is dominated by gas and hydro power projects, while the share of renewable energy is significantly low. But the government has taken measures to change this. The Ministry of Energy and Mines has conducted two renewable energy auctions so far with impressive results. The first auction, held in 2010, saw solar power projects with 173 GWh/year generation potential auctioned. During the second auction, solar power projects with generation potential of 43 GWh/year were auctioned.
The Majes and Reparticion solar power projects were allocated to the project developers in the first auction in 2010. The projects are believed to have attracted investment of $140-150 million.
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