Oil and gas co Echo Energy agrees entry into Chilean solar market

Latin America-focused upstream oil and gas company Echo Energy plc (LON:ECHO) said today it has entered into an option agreement to buy a 70% stake in a Chilean solar project approaching a ready-to-build status.

The deal is with local firm Land & Sea SpA (LAS) and is in relation to the 3-MW Vincente Mendez solar project, which will be part of the Chilean PMGD Scheme.

In the event of exercising the option, Echo Energy will not make any upfront acquisition payment but will provide a loan to cover 100% of the construction costs, currently estimated at USD 2.6 million (EUR 2.3m). In return, it will get a 70% stake in the project company, called Zorro Solar SpA.

The loan will be repaid to Echo at 4% interest when the plant is fully completed and sold. Construction is seen to start in the second quarter of 2022 and be finalised in the third quarter of 2023.

"Chile is a sweet spot for renewable energy in Latin America, and our entry to the region diversifies our geographic footprint whilst providing near term catalysts as we progress the new project,” said Martin Hull, CEO of Echo Energy.

(USD 1.0 = EUR 0.873)

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