The Project will expand the existing 1.4 MW La Huayca I photovoltaic (PV) solar power plant, to a total capacity of 30.5 MW. The plant is being developed by Selray Energias Ltda. (the “Sponsor”), a joint venture between German solar developer Saferay GmbH and a local electrical engineering and service company, Seltec Ltda., and would be the first large-scale merchant solar project in Chile’s SING (Northern Interconnected Electricity) system. The Project consists of the installation of 124,738 fixed tilt solar panels on approximately 50 hectares of land owned by Seltec and the plant’s connection to the grid through an 18 km transmission line. The Project is expected to have a total cost of US$67 million, excluding VAT, with construction beginning by July 2013 and be fully completed by March 2014. The project will be implemented through SPS La Huayca S.A. (the “Project Company”), a special purpose vehicle incorporated in Chile, and owned 100% by Selray Energias Ltda. Energy produced from the Project would be injected into the SING system at prevailing spot market tariffs. Such a project, which would sell its output to the spot market with no feed-in or subsidized tariffs, would be the second for IFC behind the Aura Solar project in Mexico, and one of the first debt-financed solar projects worldwide without such support.

The Project will support the Chilean government’s concerted effort to encourage development of unconventional renewable energy (ERNC) (includes all Renewable Energy except large scale hydro projects).