AIRTRICITY FOUNDER Eddie O'Connor's latest energy venture has signed a €785 million deal to develop wind farms in Chile.
Mainstream Renewable Power, set up by Mr O'Connor in February with the bulk of the €50 million he earned from the sale of Airtricity's businesses in the US and Europe last year, said that it has signed a $1 billion (€785 million) joint venture deal in Chile with local player Andes Energy.
The pair plan to develop wind farms with the capacity to generate 400 mega watts (MW) of electricity - enough power for about 217,000 homes according to the company's own figures.
Mainstream said yesterday that this would include a 35MW wind farm in the Valparaiso region of the country, which is due to come on stream within two years.
The company said yesterday that it will produce enough electricity for over 19,000 homes.
Under the deal's terms, Mainstream Renewable Power will hold a 90 per cent stake in the venture, while Andes Energy will hold the remaining 10 per cent.
Commenting on the deal yesterday, Mr O'Connor said that the company had chosen Chile because its government is putting the "optimum support structures" in place for renewable energy.
Most developed countries support renewable energy by putting in place guaranteed tariffs for the power produced, which help to underpin revenues and make these operations attractive investments. The charges are ultimately passed on to consumers.
Mr O'Connor set up Mainstream Renewable Power with former Airtricity corporate finance manager Fintan Whelan early this year, soon after completing the sale of their original company to Scottish Southern Energy for €1 billion.
Backers include Barclays Bank, which recently bought a 15 per cent stake for €20 million, giving it an overall value of €130 million. The bank bought during a €40 million fund-raising that included a cash injection from directors, managers and associates.
Analysts believe that higher commercial lending rates mean that it is no longer likely that renewable energy companies will command the kind of price that Airtricity earned last year.
