Shares in Vancouver-based power producer Etrion (
TSX:T.ETX,
Stock Forum) jumped $0.44 to $0.73 Thursday upon news the $113m market cap company will own 70% of a joint venture with Total (
NYSE:TOT,
Stock Forum) and Solventus Energías Renovables to build and operate Project Salvador, what the partners are calling ‘the world’s largest solar merchant project.’
The project, to be built in Chile, will be a 70 megawatt-peak photovoltaic power plant in the Atacama region of the country. Pursuant to the terms of the related purchase agreement, Etrion, Total and Solventus will own 70%, 20%, and 10% interests, respectively, in the project.
According to a news release, “The total project cost of approximately US$200 million will be financed 70% through non-recourse project debt from the Overseas Private Investment Corporation, the US Government's development finance institution. The remaining 30% equity portion will be funded by Etrion, Total and Solventus, based on their respective ownership interests.”
The project will be constructed by Sunpower (
NASDAQ-GS:SPWR,
Stock Forum), a Total affiliate, with that company also entering into a long term maintenance program at the facility.
Marco A. Northland, Etrion's CEO, is obviously pretty happy with the deal; "Project Salvador will demonstrate that solar is a viable and sustainable power solution in Chile given the strong solar irradiation and high electricity prices in the region. This project diversifies our portfolio in terms of geography and contract regime, demonstrates our ability to compete with traditional sources of electricity in a non-subsidy environment and provides a clear platform for growth that will give Etrion the option to declare dividends in the future."
Construction on the project is expected to start in Q4 2013, and the hope is for the facility to be operational by Q1 2015. Project Salvador is expected to produce approximately 200 gigawatt-hours of solar electricity per year, enough to supply electricity to approximately 60,000 people in Chile, according to the release.
Prior to the announcement of this project, Etrion ran approximately 60 MWp of operational, ground-based solar photovoltaic power plants in Italy.