La Huayca II


This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein that has been prepared by the project sponsor, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein.
It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision.

Project number 33192
Company nameSPS LA HUAYCA S.A.
SectorV-BF - Solar - Renewable Energy Generation
Environmental categoryB
Date SPI disclosedMay 21, 2013
Projected board dateJune 28, 2013
RegionLatin America and the Caribbean
Date revised SPI disclosedMay 21, 2013
Previous EventsInvested: December 16, 2013
Signed: October 31, 2013
Approved: June 28, 2013

Project description
The Project will expand the existing 1.4 MW La Huayca I photovoltaic (PV) solar power plant, to a total capacity of 30.5 MW. The plant is being developed by Selray Energias Ltda. (the “Sponsor”), a joint venture between German solar developer Saferay GmbH and a local electrical engineering and service company, Seltec Ltda., and would be the first large-scale merchant solar project in Chile’s SING (Northern Interconnected Electricity) system. The Project consists of the installation of 124,738 fixed tilt solar panels on approximately 50 hectares of land owned by Seltec and the plant’s connection to the grid through an 18 km transmission line. The Project is expected to have a total cost of US$67 million, excluding VAT, with construction beginning by July 2013 and be fully completed by March 2014. The project will be implemented through SPS La Huayca S.A. (the “Project Company”), a special purpose vehicle incorporated in Chile, and owned 100% by Selray Energias Ltda. Energy produced from the Project would be injected into the SING system at prevailing spot market tariffs. Such a project, which would sell its output to the spot market with no feed-in or subsidized tariffs, would be the second for IFC behind the Aura Solar project in Mexico, and one of the first debt-financed solar projects worldwide without such support.

The Project will support the Chilean government’s concerted effort to encourage development of unconventional renewable energy (ERNC) (includes all Renewable Energy except large scale hydro projects).


Project sponsor and major shareholders of project company
The Project company is 100% owned by Selray Energias Ltda, which is in turn owned 50% by Saferay Holding GmbH of Germany and 50% by Seltec Ltda., a local engineering and electrical service company. Both sponsors are privately owned entities. As of December 31, 2012, Saferay Holding has 163MW of installed capacity in Germany (210MW including those it built but does not own), and is in the process of expanding their operations internationally. Although Saferay itself was established only in 2010, its management consists of industry experts with extensive experience in solar power. Seltec is a Chilean company established in Iquique and has been providing engineering and electrical services primarily to mining companies in the region for over 20 years. While Saferay brings in the international experience developing and constructing large scale PV plants, Seltec brings in the complementary local knowledge and resources needed to implement the Project.
Total project cost and amount and nature of IFC's investment
The Project is expected to cost US$67.1 million, excluding VAT, and will be financed by a Senior Loan Tranche comprising IFC A Loan of up to US$9.2 million, IFC managed Canada Climate Change Program (CCCP) Senior Loan of US$9.2 million and DEG Senior Loan of US$18.5 million, and a Subordinated Loan Tranche comprising IFC C Loan of US$5.0 million and CCCP Subordinated Loan of US$5.0 million.
IFC investment as approved by Board
14.3 million (USD)
Product LineIFC Investment (million USD)
Risk Management 

* These investment figures are indicative
Location of project and description of site
The project is located west of the village of La Huayca, approximately 41 km east of the coastal city of Iquique in Chile’s Atacama Region which has one of the highest solar irradiations in the world. The Project site is in the Atacama desert with sparse vegetation and no residents, but with adequate road access for construction. The land is owned by Seltec, the local sponsor.

Development Impact

Expected Development Impact
The IFC investment will: (i) provide a critical global demonstration effect of the viability of financing a solar merchant power project with no feed-in tariffs; (ii) enable the implementation of utility-scale zero-emission technology power generation sources, decreasing overall emissions of CO2 and GHG; and (iii) continue IFC's track record of providing developmental impact in Chile through the implementation of innovative projects with potential for replication, initially in the small hydro and wind sector and now in the solar sector. If successful, this investment could greatly open up the market for rapid development of solar energy in the country.

IFC's Expected Role and Additionality
By providing and mobilizing a project-finance debt package for one of the first medium-sized solar photovoltaic power plants in Chile, without a secure off-take agreement, IFC will enable the Project to have an important demonstration effect and will signal that medium-scale merchant solar projects are bankable in Chile. If successful, this could lead to increased development of solar power in Chile. Furthermore, FC will help establish adequate E&S policies and performance standards in order to mitigate risks and ensure compliance with IFC performance standards. By doing so, IFC will also help the local sponsor and project company develop and implement best-practice E&S policy.

E&S Risks / Impacts and Mitigation

Environmental & Social Categorization Rationale
The proposed investment is a Category B project because the potentially limited environmental and social impacts that may result from constructing and operating the solar power generation and transmission facilities can be avoided or mitigated by adhering to generally recognized good practices and design criteria.

To view the environmental documents for this project, click here


For inquiries about the project, contact:
Humberto Romero
General Manager
Selray Energias Ltd.
Via 5 Mz.F, St. 2, Bajo Molle, Iquique, Chile
Tel. 56-57-248-726

For inquiries and comments about IFC, contact:
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster
Local access of project documentation
The Company will disclose this document in local prevailing Spanish language in municipal authorities in La Huayca and Pica communities.

Supporting Documentation