March 8, 2017 / 7:52 PM / 5 months ago

REFILE-INTERVIEW-Atlas Renewable Energy on hunt for low-risk solar assets

3 Min Read

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By Gram Slattery

SANTIAGO, March 8 (Reuters) - Atlas Renewable Energy, a platform launched last week by English private equity fund Actis, is on the hunt for solar assets across Latin America, but big risks are off the table, Chief Executive Officer Carlos Barrera told Reuters on Wednesday.

Actis, which already has significant investments in renewables throughout the developing world, announced last Wednesday it had established Atlas by committing $525 million to acquire over 1,500 megawatts of solar projects across Latin America from now-bankrupt SunEdison.

Atlas' bread and butter markets are Mexico, Uruguay, Chile, and Brazil, and Barrera said in a phone interview the company was looking at opportunities for expansion in a variety of other nations, like Peru and Colombia.

But the projects would have to be low-risk, and merchant solar parks, a kind of project that has emerged in recent years in South America in which solar plants sell directly to public transmission grids without any pre-existing purchase agreement with a government or private actor, were a no-go.

"This new platform is very much looking for high-quality, low-risk assets. The prospect of us investing in merchant is very slim, so we didn't purchase any merchant," Barrera said.

In Chile, where Atlas will be based, the company purchased SunEdison's Quilapilun solar park, a 110-megawatt project near Santiago, the capital, which has a long-term power purchase agreement with local distributors.

Across the region, Barrera said Uruguay has an attractive, well-developed solar market, but sufficient power capacity in the short-term means new construction may not be imminent.

Mexico also holds promise, with the biggest challenge being competition.

"Mexico has had great success in regulated tenders for renewables, and I think they will continue to do that. There's a lot of macroeconomic noise over Trump, but I think it's largely overstated," Barrera said, referring to U.S. President Donald Trump.

"Obviously the big challenge there is that...there are a lot of competitors accepting different rates of return."

Colombia, though more of a frontier market for renewables, has solid fundamentals and a less saturated energy market ripe for solar development, Barrera said.

In Argentina, where conservative President Mauricio Macri is enacting free-market reforms and the government recently held a 1.1 gigawatt renewable energy auction, Atlas is looking but is not yet ready to leap.

"We're low-risk investors, so we need to make sure this trend is sustained, and we'll probably look at it more over the next two quarters." Barrera said. "But I think we're very intrigued." (Reporting by Gram Slattery; Editing by Leslie Adler)

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