China to fund huge Argentinian wind farm
A US$3 billion loan from China and Chinese wind turbines will be used to build Latin America’s largest wind power project.
Argentinean renewable-energy developer Generadora Eolica Argentina del Sur SA (Geassa) said it expects to obtain project financing from China Development Bank Corporation, one of the three policy banks in China primarily responsible for raising funding for large infrastructure projects.
The project to be located at Chubut province in southern Argentina will house Chinese-made wind turbines capable of generating a combined 1,350 megawatts of electricity. The complex will span 45,000 hectares.
The wind project will provide 4% of Argentina’s power once fully operational in 2017. The first 150 megawatts is expected to start producing power in February 2015.
It will be larger than a 306MW cluster of wind farms in Mexico, which is Latin America’s biggest wind-energy installation.
Latin American developers are buying Chinese wind turbines packaged with financing since the combination is less expensive and easier to arrange than loans from local banks. These deals are especially attractive in Argentina, which has been blocked from international bond markets since it defaulted on US$95 billion of debt during a financial crisis in 2001 and 2002.
“Argentina can’t get finance from Europe or the U.S.,” said Geassa executive vice president Eduardo Restuccia. That gives the Chinese an edge financing energy projects in Latin America.
Restuccia expects the deal to be closed this December. Beijing Construction Engineering Group will build the project and will own 25% of the project along with the yet unspecified wind turbine maker.