Canadian renewables developer Polaris Infrastructure Inc (TSE:PIF) has struck a deal to revise the terms of the power purchase agreement (PPA) tied to its San Jacinto geothermal power plant in Nicaragua, securing, among others, ten more years to the contract life.
The Latin America-focused company operates the 72-MW net plant through wholly-owned subsidiary Polaris Energy Nicaragua SA (PENSA).
Polaris said that the revision, which was negotiated with Nicaragua’s ministry of energy and mines, had been approved by the company’s board of directors. The amended terms are effective immediately.
The PPA, set to expire in 2029, was extended to January 2039, while the 2020 price of USD 130.712 (EUR 107.092) per MWh was reduced to a non-indexed USD 110.00/MWh, Polaris said.
Also written in the new contract is the company’s plan to build a binary generating unit of up to 10 MW at the San Jacinto facility.
Other changes include a longer tax holiday on income, so that income taxes will be payable in 2025 instead of 2023, and the elimination of the previous price penalty clause requiring a minimum power production delivered.
Polaris said it expects that the beneficial terms will enable it to refinance the existing project loan on conditions that are favourable to shareholders.
(USD 1.0 = EUR 0.819)
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