Eddie O’Connor’s Aela wins $600 million Chilean contract

A Chilean renewable energy joint venture involving Eddie O’Connor’s Mainstream Renewable Power (MRP) will invest $600 million (€544 million) in new wind farms there, after winning a major State contract.

Aela Energía, in which Mr O’Connor’s company holds a 40 per cent stake, has won the right to develop and operate 265 megawatts (MW) of new wind capacity, with a 20-year mandate to feed the power from the wind farms into Chile’s regulated electricity market from 2017. The contract awards were made as part of a Chilean auction for green energy operators, in which Aela was up against more than 30 other operators.

The South American country’s government sought tenders for a total of 1,200 gigawatt hours, a standard metric for the output of power infrastructure over time. Aela said it won contracts to provide 65 per cent of this figure.

Expertise

MRP provides much of the expertise on the ground for Aela, in which its partner is private equity outfit Actis. MRP conducts the development work and oversees projects, which are then lined up for purchase by Aela on completion.

Aela has a fund of about $400 million for Chilean projects, which, when leveraged, could see investment of about $1.4 billion. Actis put up $290 million of the equity; MRP invested the remainder.

Aela intends to build about 600 MW of renewable energy infrastructure in Chile in coming years, incorporating wind and solar projects. MRP is also active in Chile separately from Aela. It reportedly has 11 wind projects in Chile with full environmental licences, and three awaiting permits.

Bart Doyle, who has worked with Mr O'Connor since his Airtricity days, runs MRP's operation on the ground in Chile. He said that the Aela contract award was the culmination of seven years of work by MRP.

Mr O’Connor, a former Bord na Móna chief executive and an advocate of renewable power, does not hold an executive role with Aela. But his spokesman said he has a “strategic” role in the joint venture.