Pemcorp gas-fired plant refi signing nears
Arroyo Energy is expected to sign on a $170 million seven-year loan in April to refinance the debt package stapled to its 131MW Pemcorp simple-cycle gas-fired project in Mexico.
The project, located in Pesqueria, Nuevo Leon, is backed by a 20-year PPA with South Korean car maker Kia Motors and Hyundai Engineering and Construction. The deal is structured as a single PPA, since both offtakers have the same parent company − Hyundai Motor Co. Kia buys 55MW of the plant's output and Hyundai 45MW. Commercial operation began in October 2019.
Lead arrangers SMBC and Natixis were recently mandated to sound out bank appetite for the deal, with Korean Development Bank (KDB) said to be re-joining the funding mix – KDB was part of the primary financing, a $126 million five-year debt package priced around 280bps over Libor. The sponsor can expect to obtain better terms and higher leverage as a result of the refinancing.
The Pemcorp facility connects directly to the Kia and Hyundai factories that use the generation, but an interconnection to the national network is underway. Once this is completed, the plant will sell the remaining 30MW output into the spot market. Pemcorp’s natural gas supply comes from across the border with the US through a Kinder Morgan pipeline. Finnish technology company Wartsila built the project and is also responsible for operations and maintenance until 2021.
Arroyo is also refinancing two renewable projects in Chile − the 115MW El Arrayan wind park in the Coquimbo region and 104MW Conejo solar park in the Atacama desert. SMBC and Credit Agricole are arranging the $400 million seven-year mini-perm, which is also expected to close in April after syndication.
