Polaris Infrastructure Inc., a Toronto-based company engaged in the acquisition, development and operation of renewable energy projects in Latin America, announced that its two run-of-river hydro projects in Peru, 8 de Agosto and El Carmen, have achieved their respective Commercial Operation Dates and have received official extensions of the Power Purchase Agreements.
Following the Company's acquisition of these and other assets on October 30, 2018, the Company set about completing construction of the projects within the terms of the applicable PPAs. El Carmen (~ 8 MW expected capacity) and 8 de Agosto (~ 20 MW expected capacity) are in the Huanuco region of Peru. Successful management of the Company's construction and engineering partners, coupled with effective cooperation from the various Peruvian government administrative bodies allowed Polaris Infrastructure to deliver on this significant achievement.
Both projects are now delivering electricity and are connected to the national grid through a 60 km transmission line owned by Polaris Infrastructure.
El Carmen's commercial operation was achieved on November 30, 2019, and 8 de Agosto achieved commercial operation on December 25, 2019. As the PPAs for both projects stipulate required CODs of October 28, 2019, formal extensions were required from the Peruvian Ministry of Energy and Mines ("MINEM") for such PPAs to remain valid. Polaris Infrastructure has now received the formal extensions from MINEM with extension dates in the first quarter of 2020 for both 8 de Agosto and El Carmen. Accordingly, any electricity that is delivered after such commercial operations dates is recognized under the corresponding PPA pricing terms.
"The completion of the construction of the hydro projects in Peru is another important milestone for the company. The combination of strong cash flow generation at San Jacinto with additional revenue and cash flow from our hydro projects in Peru sets the company up very well for 2020. The additional diversification of revenue and cash flow will enable the company to continue to grow and diversify as well as return capital to shareholders," says Marc Murnaghan, chief executive officer of Polaris Infrastructure.
