Oikocredit makes $11m investment in Honduran solar power plant
In February, social investor and worldwide cooperative, Oikocredit, invested US$ 11 million in Compañía Hondureña de Energía Solar, S.A. de C.V. (COHESSA), a solar energy company established to build, own and operate the solar power plant ‘Valle Solar’ in the province of Nacaome in southern Honduras. Honduras is the second poorest country in Central America, with the World Bank estimating that 62.8% of the population were living below the national poverty line in 2014.
In 2014, COHESSA signed a 20-year power purchasing agreement (PPA) with state-owned facility Empresa Nacional de Energía Eléctrica (ENEE), ensuring a long-term buyer of all clean energy put into the Honduran grid. The PPA is part of a wider strategy to diversify Honduras’s electricity matrix to reduce the country’s dependence on thermal power plants. Valle Solar will therefore provide more reliable, cleaner and less expensive sources of energy to Honduras.
In May 2015, the Valle Solar power plant and the adjacent Nacaome power plant were inaugurated by the President of Honduras, Juan Orlando Hernández. The two neighbouring sites form not only the largest solar power plant in Honduras, but also the largest in the whole of Latin America.
Renewable energy strategy
Oikocredit’s investment of US$ 11 million forms part of a $ 120 million project with International Finance Corporation (IFC) to construct and equip the Valle Solar photovoltaic (PV) plant and put it into operation. The investment is in line with Oikocredit’s renewable energy strategy, which focuses on sustainable investments with a high development impact.
Oikocredit renewable energy manager, David ten Kroode, said: “The Valle Solar PV project is a significant step for Honduras on the road to diversifying its energy mix away from imported fossil fuels. The project is expected to generate 122 GWh per annum, which can meet an estimated 7% of the country’s electricity demand. We are excited at Oikocredit to participate in a solar project on this scale together with IFC because it has a significant impact on Honduras’s infrastructure and huge environmental benefits in avoiding CO2 emissions.”
In addition to reducing the country’s dependence on imported fossil fuels, the project generated about 400 jobs at the peak of construction and a workforce of 20-30 jobs during its current operational phase.
The solar power plant is expected to provide energy to more than 71,000 homes. The Honduran government expects that by 2025, seventy-five per cent of Honduran households will use clean energy.