SolAer closes $71 million financing for its first wind project in Chile

The renewable energy company secures bank financing led by DNB Bank to construct the Calbuco wind and energy storage project. The project, already under construction, is expected to connect to the grid during 2027.

SolAer Renewable Energies announced the signing of a binding financing agreement of up to $71.3 million for the construction of the Calbuco wind project in Chile. The financing, provided by an international bank consortium led by DNB Bank, will enable the completion of the project, which includes 47.2 MW wind turbines and an 80 MWh energy storage system. This marks a first strategic move for the company in Chilean wind energy, with grid connection expected in 2027.

SolAer Renewable Energies Ltd. (TASE: SOLR) reported a significant milestone in its international operations, signing a binding financing agreement for the construction of the "Calbuco" wind and storage project in Chile. This is the company's first wind project in the country, and the current agreement secures the required financial framework for its completion. The project company, held indirectly by SolAer at approximately 47.4%, signed the agreement with a syndicate of global banks led by Norway's DNB Bank ASA, a world leader in energy project financing.

Financing deal details

According to the filing, the credit facility includes a senior loan of up to $65 million for project construction, alongside a facility of up to $6.3 million intended for guarantees and VAT payments, totaling a potential financing package of up to $71.3 million. The loan will bear variable interest based on the SOFR rate plus a margin of approximately 2.3% for the first four years, increasing to roughly 2.55% thereafter. Loan repayment will be made in semi-annual principal and interest payments over a 5-year period from the agreement date.

Project progress and financial forecasts

The Calbuco project involves constructing wind turbines with a total capacity of 47.2 MW, alongside a battery energy storage system with a capacity of approximately 80 MWh. Construction work began in early 2026, and according to the company, road preparation and civil engineering works have been completed, with turbine foundation laying underway. Connection to Chile's national electricity grid is expected during 2027.

The company provided a financial forecast for a full representative operational year of the project (based on 100% ownership). Total construction cost is estimated at approximately ₪270 million. Expected annual revenues stand at roughly ₪48 million, with EBITDA (earnings before interest, taxes, depreciation, and amortization) of around ₪37 million. FFO (funds from operations) is projected at approximately ₪30 million, and FCF (free cash flow) at roughly ₪19 million.

Strategic move in Chile

For SolAer, signing the financing agreement represents a strategic milestone. This follows the company's report in August 2025 on signing a binding 11-year power purchase agreement (PPA) for the project. The combination of secured power sales and closed financing mitigates project risk and provides cash flow certainty. The move aligns with the company's strategy to develop and build projects while hedging long-term revenues to achieve double-digit returns on equity. Loan drawdowns remain subject to customary conditions, including equity and shareholder loan contributions of at least 35% of project cost, and the signing of all material project agreements, including an EPC contract.