Polaris Infrastructure completes US$27 million debt financing for small hydro

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Polaris Infrastructure Inc. has closed on a US$27 million loan financing with the Brookfield Infrastructure Debt Fund, a global credit-focused fund managed by Brookfield Asset Management Inc.

Polaris Infrastructure is a Toronto-based company engaged in the operation, acquisition and development of renewable energy projects in Latin America. The company operates a 72-MW geothermal project in Nicaragua and three run-of-river hydroelectric projects in Peru: 5-MW Canchayllo, 8-MW El Carmen and 20-MW 8 de Agosto.  

According to BNamericas, the loan was made to a 100% owned non-operating subsidiary of Polaris that holds all of the equity of its three operating hydro projects.  The proceeds of the loan will be used to repay the US$4 million aggregate principal amount of the existing senior loan at Canchayllo, and the remaining net proceeds will be used for general corporate purposes.

Under the terms of the eight-year loan, Brookfield Infrastructure Debt Fund has been granted senior security on the Canchayllo project and second security on the El Carmen and 8 de Agosto projects. 

“I am very pleased to have raised capital from such a reputable party in our industry and during such a difficult market environment,” said Marc Murnaghan, chief executive officer of Polaris Infrastructure.  “This capital will enable us to continue to pursue corporate development opportunities that we see in the market.  Accessing alternative and non-dilutive pools of capital is a strategic initiative for the company as we continue to grow and diversify.”

“We are pleased to provide Polaris with a flexible hold-co financing solution on their Peruvian hydro assets, backed by long-term PPAs, as they continue to expand into new jurisdictions in South America,” said Hadley Peer Marshall, Brookfield’s managing director and head of infrastructure credit for the Americas.

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